A&M: UK corporate crisis has deepened recently

Financial distress among UK companies is on the rise, hitting a record high since the start of the COVID-19 pandemic. In 2024, 11.2% of British firms were struggling with low profits and lack of liquidity, Alvarez & Marsal consultancy said.

Surging costs and high interest rates are still putting serious pressure on businesses, according to Bloomberg. Therefore, UK companies are forced to adapt to the new economic environment. Debt servicing has always been a significant drain on corporate cashflows. Additional pressure comes from the government's decisions to increase social security contributions and raise the minimum employee wage.

The agency says the crisis is most acute in sectors dominated by low-income workers, including construction, retail and hospitality, which are particularly vulnerable to new economic challenges.

A similar trend is taking place outside the UK. Financial distress among companies has been mounting in other European countries, Bloomberg journalists report.