According to a recent report by Begbies Traynor, the number of UK companies in "severe" financial distress increased by 13.1% in the first quarter. Consumer-facing sectors were hit hardest, with pubs and restaurants experiencing a 31.2% rise, travel and tourism companies up by 25.5%, and general retailers seeing a 12.4% increase in distress.
The report highlights that real estate and property services, construction, and general retail, key indicators of the UK economy, account for over one-third of these distressed companies, reflecting the uncertain economic environment. Begbies Traynor warns that if operational pressures do not ease in the next 12 months, many of these severely distressed companies could face formal insolvency proceedings.
