PRESS RELEASE : PwC comments on December’s insolvency data [January 2023]

The press release issued by PWC on 17 January 2023.

David Kelly, Head of Insolvency at PwC, comments on December’s ONS insolvency data:

“December’s data shows 1,964 company insolvencies this month – a 32% rise year -on- year and a 76% rise on the same month 3 years ago, pre-pandemic. However, there are fewer than the month before (November 2022), where there were 2,029 insolvencies.

“While the slight decline in insolvencies this month is welcome news, it is likely in part due to the respite offered by increased trade during the World Cup, particularly in sectors such as retail and leisure, which may still be under increased pressure from cancellations as a result of recent industrial action. It’s also not uncommon for creditors to give debtors one last chance over the Christmas trading period and kick difficult decisions into the New Year.

“Despite there being fewer insolvencies than November, company directors are under no illusions about the challenges in store this year, ranging from high inflation and rising interest rates to poor consumer sentiment and increasing raw material costs. Many are also exhausted from the last few years having already contended with a pandemic and supply chain issues, so may be raising the white flag for insolvency as a consequence of this fatigue.”

Catherine Atkinson, Director in PwC’s restructuring and insolvency team, added:

“In keeping with the decrease in insolvencies in December, our analysis shows there were only 346 winding up petitions in December – a 27% decrease from November’s 474. As formal applications from creditors to shut down companies, these are a key bellwether of creditor sentiment, and while the lower number is likely to have been impacted by the  holiday period, it remains to be seen whether creditors will take a more lenient, collaborative approach with debtors as we head into the recession.”