The number of companies in England and Wales going bust jumped to the highest in over a year in June, as many succumbed to the pressure of high interest rates.

There were 2,361 company failures, 17% more than in the same month a year earlier, the government’s Insolvency Service said on Friday. It was highest number since May last year and the joint third-highest in records dating back to 2000.

The figures reveal the continuing toll that high interest rates and mounting cost pressures are having on company balance sheets.

The number of firms going bankrupt has risen sharply since the removal of protections put in place during the pandemic and are well above levels seen before Covid.

“High borrowing costs and wage growth are still very a much a concern to business owners,” said Mark Supperstone, managing partner at ReSolve, a business advisory and restructuring firm. “A drop in interest rates is now perhaps unlikely to take place until later this year, although there is still hope of a reduction in August.”

Relief from high borrowing costs may begin to come from the Bank of England next month with traders putting a 40% chance of an interest-rate cut.

Industry figures for May showed that builders, retailers, restaurants and bars have been hardest hit by the surge in insolvencies.

  - Bloomberg