THE NUMBER of companies in “significant” financial distress in Milton Keynes has risen by more than 49%, new research from a business recovery specialist has shown.
The data in the quarterly Red Flag Alert report by Begbies Traynor highlights the speed at which financial distress has accelerated over the last 12 months. Economic challenges facing many companies continue to put considerable financial pressure on businesses across the city, with 451 at risk of economic failure.
The number represents a quarterly increase of 23.2% and an annual rise of 49.3%.
The report monitors the financial health of UK businesses. Its latest findings show that telecommunications, IT and support service businesses are being particularly hard hit.
Julie Palmer, partner at Begbies Traynor’s office in Milton Keynes, said: “The macroeconomic conditions that made last year so difficult have continued to exert unrelenting pressure on corporate balance sheets. Despite some optimism as we entered the new year, 2024 has so far been characterised by a continuation of the same pressures that plagued companies in the UK throughout 2023.”
Nationally, the Red Flag Alert research for Q1 2024 recorded 554,554 businesses in significant distress, almost 31%higher than in the same period in 2023. The more serious “critical” financial distress number is up year on year by just over 20% to 40,174 UK businesses affected.
Begbies Traynor says that historical data indicates that a large percentage of those in “significant” distress are likely to progress towards “critical” level and potential insolvency if the economic backdrop does not improve.
“Unfortunately, there is no quick fix for our economy and with inflation falling slower than expected, hope of a significant fall in interest rates in the near future seems to be fading,” said Ms Palmer. “Sadly, the pressing issues facing many businesses today will simply push many over the edge and contribute to the current high level of UK corporate insolvencies.”
