Begbies Traynor (AIM:BEG) has reported a sharp jump in businesses in "critical financial distress" in the final quarter of last year.
Its latest Red Flag Alert report, the accountancy firm said it found there were more than 47,000 businesses near collapse in the UK at the start of 2024.
That’s a 25% jump on the 37,722 recorded at the end of the third quarter, and the second quarter in a row in which critical financial distress grew by around a quarter.
Every sector was affected, the consultancy’s report showed on Monday, driven by construction, real estate and support services in particular. Of 22 sectors, 18 saw at least double-digit growth in the number of firms in distress.
Begbies Traynor (AIM:BEG) partner Julie Palmer said: "For some, a better-than-expected Christmas may kick these concerns down the road for a little longer, but the rapid growth in the levels of critical financial distress point to an economy that is waking up to the danger of debt ladened businesses in a higher rates environment.
"Sadly, for tens of thousands of British businesses who should be looking ahead to 2024 with some degree of optimism, the new year will bring a fight for survival.”