Business news 15 March 2023
James Salmon, Operations Director.
Company insolvencies hit four-year high
Insolvency Service data shows that the number of companies entering insolvency rose by 17.5% year-on-year in February, hitting 1,783. Nicky Fisher, vice-president of the restructuring industry body R3, said corporate insolvency figures had hit their highest in four years, with this driven by directors choosing to close their own businesses using creditors’ voluntary liquidations (CVLs). Ms Fisher said: “After nearly three years of lockdowns, supply chain issues, rising costs and falling revenues, many business owners have simply had enough, and are shutting up shop before they are forced to.” The number of CVLs rose by 13% to 1,505 last month, while 158 compulsory liquidations were recorded, twice the number seen in February 2022. Reflecting on the figures, Lindsey Cooper of RSM UK’s restructuring advisory business said: “The impact of rising interest rates has yet to fully bite,” adding that tighter finances will “continue to cause issues for those companies who already have weak cashflows and so we expect the rise in insolvencies to increase for the next few months.”
KPMG stands by audits of collapsed banks
KPMG has defended its audits of Silicon Valley Bank and Signature Bank, with US chair and CEO Paul Knopp saying the firm’s audit work considered all the facts available at the time and that “market-driven events” in the intervening period led to the banks’ failures. KPMG said audit opinions “are based on audit evidence available up to and at the date of the opinion,” adding: “Any unanticipated events or actions taken by management after the date of an opinion could not be contemplated as part of the audit.”
Britishvolt owed £160m when it collapsed
Battery start-up Britishvolt collapsed owing about £160m to unsecured creditors who are unlikely to see a significant dividend from the company’s insolvent estate. EY, which has been managing Britishvolt’s administration, said: “It is too early in the administration to advise whether or not there will be sufficient funds available to enable the payment of a dividend to non-preferential creditors.” The joint-administrators currently expect any dividend to equate to less than 1p in the pound.
Wage growth slows and job vacancies fall
Data from the Office for National Statistics (ONS) shows that UK wage growth slowed in the three months to January. Wage growth fell to 5.7% from a revised 6% in December, putting the average pay rise 3.2% below the rate of inflation. The report shows that pay growth in the private sector fell for the first time in a year, dipping from 7.3% to 7%, while public sector wages were up 4.8%. The average weekly salary in the UK, excluding bonuses, stood at £589 in January, with this up by £1 on the month before. With inflation taken into account, the average salary fell by 2.4% in the three months to January compared to the same period last year. Darren Morgan, director of economic statistics at the ONS, said: “Although the inflation rate has come down a little, it’s still outstripping earnings growth, meaning real pay continues to fall.”
PwC economist Jake Finney said: “UK workers experienced the sharpest fall in their real earnings since 2009 as strong pay growth fell back faster than inflation.” ONS data also shows that the proportion of working age people with a job increased to 75.7% in the three months to January. There were 2.5m people off work due to long-term sickness in the period – with this up 2.6% quarter-on-quarter and 7.9% year-on-year. There were 220,000 working days lost to strike action in January. Meanwhile, the number of jobs on offer fell by 51,000, taking the total number of vacancies down to 1.124m.
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The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for some time to come.
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When you see your money come in, you will be so glad you used CPA.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
Have you been paid late by business customers in the last six years?
Maybe you no longer work with them. Under legislation, you are entitled to compensation you for those late payments you have suffered.
You put up with the PAIN – now claim the GAIN!
Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.