Nearly 2,000 British businesses collapsed into insolvency in August as economic pressures and geopolitical tensions continued to weigh heavily on firms across England and Wales.
Figures released by the Insolvency Service show that 1,946 companies went into insolvency in England and Wales in August, roughly flat compared to July and down slightly from 2,007 in August 2025.
Compulsory liquidations rose 8 per cent month on month and 5 per cent year on year, even as voluntary liquidations fell during the same period.
Creditors are actively chasing debts to balance their own books, while HMRC continues to pursue outstanding tax debts to recover money for the public purse.
Administrations jumped 44 per cent from July and 60 per cent from August 2025, driven largely by more than 250 real estate companies collapsing in the month.
City AM had previously reported in June that real estate firms were going bust at the fastest rate in a decade, hit by weakening consumer confidence and spiralling building costs linked partly to the Iran War.
Benjamin Wiles, managing director of restructuring at Kroll, described the overall picture as “challenging”, pointing to “early signs of distress” among building materials businesses hit hard by spiralling energy costs.
Blair Milne, partner at Azets, dubbed August a “summer of sorrow”, noting that insolvencies struck brands once considered resilient to the cost-of-living squeeze, including restaurant chain Beefeater.
Giuseppe Parla, restructuring and insolvency director at Menzies, warned that more insolvencies could follow in hospitality as “sector costs continue to rise” with increases to business rates, national insurance, and the national minimum wage.
Last week’s announcement of a tourist tax and ongoing debate over bans on vertical drinking has added further uncertainty for hospitality businesses already operating on tight margins.
The new insolvency data arrives as the UK government faces heavy criticism from a former Bank of England chief economist over its “tax and spend socialist” commitments ahead of next month’s Budget.
Parla said that “many businesses are already holding their breath” amid rumoured tax hikes and price rises which will determine their ability to break even in an unpredictable economic climate.
Next’s chief executive Lord Wolfson urged Chancellor John Healey to cut spending at the upcoming Budget, warning that “you can’t spend your way out of a funding crisis”.
The combination of rising insolvency numbers, a looming Budget, and persistent cost pressures suggests the autumn could bring further strain for UK businesses across multiple sectors.