Almost 30,000 British companies will go bankrupt next year, PwC warns

Almost 30,000 companies will go bankrupt next year, with smaller companies accounting for the lion's share, new findings warn.

Experts at PwC claim there will be a 'significant' increase in the number of bankrupt companies, with companies in the hospitality, manufacturing and transport and warehousing sectors likely to be hardest hit.

High energy prices, slow economic growth and the consequences of higher interest rates appear likely to take their toll again next year, the findings say.

If PwC's predictions are correct, the number of business failures in Britain will reach the highest level since 2004 next year.

Barret Kupelian, chief economist at PwC, said: “There are also likely to be a lot of zombie companies, particularly those that have been riding the wave of low interest rates for an extended period of time, that are likely to face difficulties as Good.”

PwC also suggests that consumer prices will remain higher in 2024, despite the decline in headline inflation.

It said: 'Consumer prices will still be around a quarter higher than at the beginning of 2021. So consumers will continue to adjust their spending based on their priorities and preferences.'

Earlier this month, data from The Insolvency Service showed that the number of registered business failures in November was 21 percent higher than the same month last year.

Ranald Mitchell, director at Charwin Private Clients, told Newspage this month: 'The pressure on British households and businesses is increasing as high interest rates, the ongoing cost of living crisis, crippling energy prices and inflation continue to devastate the economy.

'If the Bank of England is planning to break it to save it, they are certainly doing the first part right.'

This month, insolvency experts at Begbies Traynor said they expect more companies to enter bankruptcy. The company said that “business problems continue to increase.”

British inflation fell to 3.9 percent in November, down from 4.6 percent the month before. Economists had expected a figure of 4.4 percent.

The decline, caused by easing pressure on fuel and food prices, means inflation is now at its lowest level in more than two years.

The Office for National Statistics' inflation figures have also led to calls for a rethink from the Bank of England, which has pushed back against rumors that interest rate cuts could happen soon.

The financial markets assume that, now that inflation is falling, the Bank will start cutting interest rates in the spring. Analysts at Goldman Sachs suggest that a key rate cut could come as early as February.

PwC expects headline inflation to continue moving closer to the 2 percent target next year. While problems remain and insolvencies appear to be increasing, this suggests that the picture is looking brighter in some respects for 2024.

PwC's Kupelian said: 'There remain many 'known unknowns' in 2024 that could change Britain's trajectory, such as the volatility of global energy prices due to the ongoing conflict in the Middle East and the upcoming general election. for 2024 much brighter than expected twelve months ago.'