High wage costs, increased taxes, and restrained consumption are increasingly driving numerous British companies into financial distress. Last fall, advisors and insolvency administrators already announced a significant increase in restructurings – now it seems to be becoming a reality. According to estimates by Begbies Traynor, several thousand businesses could throw in the towel in 2025 after years of trying to save themselves through low interest rates and deferrals.

While the retail segment particularly feels the effects of weak consumer sentiment, the manufacturing industry and construction sector are also getting into a precarious situation. Excessive energy costs, higher interest rates, and disrupted supply chains often hit already tight margins. According to Kroll, insolvencies in these industries increased by 20 percent compared to the previous year.

Many companies refinanced cheaply during the pandemic," says David Fleming of KR8 Advisory. "But with rising interest rates and higher operating costs, expenses are getting out of control. Those who cannot mobilize equity now face hard cuts.

While professional consultations remain affordable for larger companies, smaller businesses often lack the resources for an orderly restructuring – and they slip into insolvency more quickly. At Petersham (UK) Limited, operator of two London restaurants, diverse pressures and recent government levies led to closures.

Restructuring specialists like Alvarez & Marsal observe a disturbingly increasing number of so-called "zombie companies" that have so far survived solely through deferred loans and creditor leniency. But creditors and suppliers are now showing less leniency and are demanding their money.

In parallel, fears of an economic downturn are growing in Europe in view of heightened trade tensions. Donald Trump's repeated threats to repatriate US company production could cause new export slumps for the UK and the EU. This is likely to further increase pressure on manufacturers and service providers.