UK Businesses Face Worst Financial Crisis in Two Decades

The number of British companies in financial distress has reached its highest level in twenty years. Data from administrator BTG shows that 738,144 firms are facing significant difficulties in the third quarter of this year. This volume represents a 1.6% increase compared to the same period last year.

The support services, construction, and real estate sectors hold the highest vulnerability rates. The hospitality industry also suffered a severe impact, with a 5% growth in the number of bars and restaurants in crisis. Food and drug retailers recorded a rise of over 7% in these conditions.

This unstable scenario occurs as the government prepares to announce a new budget. BTG chief executive Mark Fry highlighted that companies are facing high energy and labor costs. Furthermore, interest rates for loans remain at levels that hinder global competitiveness.

Tax debts owed to the British treasury total 27.3 billion pounds in overdue payments. Although the government has recovered some of the outstanding amounts since the pandemic, the total still exceeds double what was recorded before 2020. The fragility of these companies is pressuring the government for immediate support measures.

Economic instability in the UK may increase risk aversion in global markets and strengthen the search for reserve assets like Bitcoin. British corporate fragility also tends to generate volatility in the British pound against the US dollar.