Company insolvencies in England and Wales rose by 51% in the month to May 2023, according to the latest statistics from the Insolvency Service.
In total, 2,552 companies were registered as insolvent last month compared to just 1,685 in April and 1,825 in May 2022.
Creditors' Voluntary Liquidations (CVLs) made up the vast majority of insolvencies, rising from 1,586 to 2,181 in the 12 months to May. The number of compulsory liquidations also rose to 189 - 34% higher than last year.
May's sharp increase in company failures was largely driven by businesses being unable to make repayments for their Covid-19 loans.
Commenting on the statistical release, Nicky Fisher, president of the trade body R3, said that ongoing economic turmoil is also "taking its toll" on businesses.
A combination of rising costs, increased creditor pressures and high inflation rates are causing many companies to turn to insolvency processes to resolve their financial difficulties.
Fisher continued:
"Going forward, interest rates and inflation will continue to create challenges for businesses seeking funding over the summer, and could be the tipping point for those businesses who are hanging in there at present."
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