Risk of insolvency – business news 30 September 2021

James Salmon, Operations Director.

Risk of insolvency for businesses. GDP. Inflation, Stagflation fears. Fuel, Gas. Retail. House Prices. And lots more business news.

Risk of insolvency for businesses 

Mazars partner Rebecca Dacre has warned that businesses that have struggled during the pandemic are at risk of collapse as the Government brings an end to temporary insolvency measures.

As of tomorrow, restrictions on winding-up petitions will start to be lifted, meaning lenders and creditors can legally seek to liquidate a company they believe is unable to pay their debts. While protections rolled out under the Corporate Insolvency and Governance Act 2020 will no longer be in place, ministers will bring in measures designed to help struggling firms.

With Furlough also coming to an end, without support, many of these struggling businesses will be forced to turn to insolvency.

The debt threshold for a winding up petition will be raised to £10,000 until March 2022 and creditors will be required to seek proposals for payment and wait 21 days before winding up. Despite these measures, Ms Dacre said “too many” businesses are now at risk.

She added that with a backlog of winding up petitions accumulated during the pandemic, “it is likely … there will be a jump in the number brought forward” once protections are withdrawn tomorrow.

If you sold B2B and are at risk of insolvency, call CPA on 020 8846 0000 and ask about our late payment compensation service. We have been unlocking compensation claims for our clients and providing them with a boost to their cashflow.

Could it save your business?


The UK Economy grew by a faster than first thought 5.5% between April and June after being revised up from the previous estimation of 4.8%, the Office for National Statistics said this morning. The ONS said this meant GDP was 3.3% below where it was in the final quarter of 2019 before the pandemic struck, against the 4.4% previously estimated.

The U.K. economy enters the final stretch of 2021 facing the challenging mix of slowing growth and rising inflation. As a result, the economy is unlikely to reach its pre-pandemic level until the middle of next year

Bank of England governor Andrew Bailey expects Britain’s economy to recover its pre-pandemic level of output early next year, with this forecast pointing to a slower recovery than the Bank predicted last month. Speaking at a European Central Bank panel, Mr Bailey said: “I expect us to be back to the pre-pandemic level in the early part of next year, possibly a month or two later than we thought we would be at the start of August”. The Bank last month forecast that the economy would regain its pre-pandemic size in the closing quarter of this year.


Bank of England Governor Andrew Bailey was alongside Federal Reserve Chair Jerome Powell, ECB President Christine Lagarde, and Bank of Japan Governor Haruhiko Kuroda as they announced  cautious optimism Wednesday that supply-chain disruptions lifting inflation rates around the world would ultimately prove temporary. “The current inflation spike is really a consequence of supply constraints meeting very strong demand, and that is all associated with the reopening of the economy – which is a process that will have a beginning, a middle and an end”

Stagflation fears for the economy
Investors fear the economy could be heading for ‘stagflation’ – a scenario where inflation surges but economic growth remains stagnant.

London stock markets and the pound have been hit by the concerns, with Sterling yesterday falling to its lowest levels against the dollar since January.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Fears of stagflation are stalking the financial markets with the fuel and wider supply chain crisis threatening to slow recovery as businesses grapple with the ogre of sharply rising prices.”

While the FTSE 100 did regain some ground yesterday, it suffered three falls in the four previous days. Reflecting on the economic climate, Samy Chaar, chief economist at wealth manager Lombard Odier, suggested: “The main market narrative is one of stagflation”, while Nomura analyst Jordan Rochester warned that the pound is “losing its inflation credibility.”


Shell UK, BP, ExxonMobil and other fuel companies in the U.K. said the situation at the pumps is beginning to improve. “We remain confident that the situation will stabilise further in the coming days and encourage everyone to fill up as they normally would to help forecourts return to normal”


Three more UK energy companies were pushed out of business by rocketing natural gas prices, adding to pressure on the government to step in. Igloo Energy Supply, Enstroga and Symbio Energy announced their collapse yesterday, representing a total of about 233,000 households.


UK Retailers lowered prices at the slowest pace annually since the start of last year, as rising cost pressure was pushed onto consumers. Shop prices declined by 0.5% year-on-year in Sept, according to the latest British Retail Consortium-Nielsen IQ shop price index.

House prices

UK House Price growth eased back to 10% in September, from 11% in August, according to Nationwide Building Society this morning. Prices increased by just 0.1% month-on-month, taking the average UK house price to £248,742.

Wm Morrison

Wm Morrison Supermarkets will go to auction, a UK watchdog said, concluding a three-month bidding battle for the Bradford-based supermarket chain. The UK Takeover Panel said the auction will take place over five rounds, all on Saturday. Clayton, Dubilier & Rice and Softbank Group Corp-owned Fortress, are the two suitors vying to acquire the grocer.


Diageo reported a ‘strong’ start to its new fiscal year, owing to sales momentum across all regions amid a continued recovery in the on-trade following the reopening of bars, restaurants. The company’s North American business was performing strongly, while Europe was recovering ahead of expectations, the company said.


Global stock markets continue to struggle as the US Government argues about the debt ceiling and a possibility of  default and a government shutdown rises. Also of concern is rising global inflation which could lead to interest rate hikes.

City leaders call for six-month visas
Financial sector bosses have called on the Government to ease visa requirements on overseas staff in a bid to maintain global competitiveness.

The Global Talent Mobility report from TheCityUK, City of London Corporation and EY has outlined ways to overcome “practical challenges” involved in hiring staff, saying a “hybrid” short-term business visa would allow staff to work in Britain for up to six months without the red tape involved with full work visa requirements. Miles Celic, CEO of TheCityUK, said that without such measures, “we will not be able to innovate in key growth areas like fintech or green finance, nor build out our international trading networks”.

The report says 19.5% of workers within UK-based financial services are international but warned that financial and related professional services firms are seeing “significant cost increases” when it comes to adding high-skilled talent.

No more visa schemes despite staff shortages
Government sources have told the BBC that, having set up temporary visa schemes for HGV drivers, ministers will not introduce visa schemes for other sectors facing staff shortages. Worker shortages in sectors including hospitality and care have prompted calls for post-Brexit immigration rules to be relaxed.

However, sources insist the Home Office and Department for Business, Energy and Industrial Strategy are not discussing the possibility of visas for other sectors. One source told the BBC businesses should “invest in their workforce and improve pay and conditions” in order to move to a high-wage, high-skilled economy.

Kate Nicholls from UK Hospitality has warned that without support such as temporary visas, the post-pandemic recovery will “falter”, with a “chronic” shortage of staff a “significant barrier” to the industry’s recovery.

High Court dismisses landlord’s CVA challenge
The High Court has dismissed a challenge from one of Caffe Nero’s landlord’s over the company’s restructuring. Ronald Young challenged the creditors decision to approve a CVA that would see landlords receive 30p per every pound in rent owed on the basis it “unfairly prejudiced his interest”, with it also claimed there had been some “material irregularity” in the decision process. Mr Justice Green dismissed the landlord’s challenge application and rejected all allegations of unfair prejudice and material irregularity. David Baxendale, restructuring partner at PwC, said: “This ruling carries major significance for landlords – both the institutional heavyweights and the smaller operators. The days of the landlord-focused CVA are clearly not numbered as the Courts have given the benefit of the doubt to the company.”

London the UK’s property investment hotspot
London remains the UK’s primary focus for property investors, according to research from FJP Investment. It was found that 40% of those planning on purchasing a property in the next 12 months are considering investing in the capital. The West Midlands was the next most likely destination for buyers, with 32% citing it, while East of England ranked third, drawing the interest of 26% of potential investors. The study also reveals that 44% of UK property investors are now more inclined to consider investing in properties in rural areas than they were pre-pandemic. Of the 512 investors polled, 44% intend to expand their property portfolio in the coming year. FJP Investment chief executive Jamie Johnson said the stamp duty holiday has “clearly played a part in boosting activity” in the market, adding that “with the worst of the pandemic hopefully behind us and investor confidence returning, property portfolio expansions are high on investors’ agendas.”

Mortgage approvals dip as net lending climbs
Bank of England data shows that net mortgage lending increased by £5.293bn in August, bouncing back from July’s net repayment of £1.758bn. Gross mortgage lending increased to £21.5bn, recovering from a low seen in July when lending came in at £16.6bn. Mortgage approvals fell to the lowest level for more than a year, with the 74,453 home-loans approved down on the 75,100 recorded in July. Martin Beck, senior economic advisor to the EY Item Club, said he expects to see demand from buyers “soften” once the stamp duty holiday ends. However, he said there could be another rise in net lending in September, “as buyers again race to complete before the tax cut ends.” The Bank of England figures also revealed that consumer borrowing rose in August, increasing by a net £351m after a rise of just £32m in July. The overall level of such lending remains 2.4% lower than it was a year earlier.

Why should you become a CPA member!

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.

CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers.

Unlike other credit management companies, we charge our members a fixed annual subscription irrespective of how high the debt value is!

It takes less than 17 minutes to see how you would benefit, do you have the time now?

No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.

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

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!

CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients

Check our compensation calculator to see how much your business could be owed!

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.