UK tipped to return to pre-pandemic insolvency levels
The UK is set to return to pre-Covid levels of insolvencies this year, amid rising inflation and the tapering of government support schemes, new research has predicted.
Credit insurer Allianz Trade has forecast that the number of UK business insolvencies will rise by 37 per cent this year, compared to countries such as France and Germany which have kept numbers artificially low with continued state support.
Ana Boata, head of economic research at Allianz Trade, said that Western Europe will see “a diverging trend” with regard to insolvencies.
“In the United Kingdom and Spain, the number of insolvencies will overtake 2019 levels by the end of this year, while in Italy, Portugal and the Nordics, the normalization will happen only in 2023,” she said.
On a global basis, the report predicted business insolvencies to rebound by 10 per cent in 2022 and 14 per cent in 2023, approaching their pre-pandemic level.
It also predicted one out of three countries to return to their pre-Covid levels of insolvencies this year.
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“The normalisation of global insolvencies has already started,” said Clarisse Kopff, chief executive of Allianz Trade.
“For some countries, catching up with 2019 figures will take a few years, but we are back to a high level of non-payment risk, both globally and locally.”
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