Jessica Fino 12 Jan 2017 04:42pm

Insolvency numbers in the UK rise after Brexit vote

The number of UK businesses entering into administration has risen in the last six months, according to analysis from KPMG

The Big Four firm found that 1,174 companies entered into administration last year, compared with 1,111 in 2015, which was then a 15-year low.

According to data collected from notices in the London Gazette, while the first six months of the year continued to see a decline in insolvencies, the second half of the year saw numbers rise.

This was partly because of the uncertainty created by the result of the EU referendum and currency market fluctuations, the firm said.

The construction industry was the worst hit, with 174 firms within the sector becoming insolvent. This was particularly due to an increase in costs for imported raw materials, which squeezed profit margins.

Moreover, 89 retailers entered into administration, as well as 19 social care and nursing homes and 26 companies from within the hotel and leisure sectors.

However, Blair Nimmo, head of restructuring at KPMG UK, said that the insolvencies level did not reflect “some of the more gloomy predictions” seen before the Brexit vote.

“So while it’s something to keep an eye on, it’s certainly not cause for alarm,” Nimmo said.

He added that, despite not expecting a sudden spike in insolvency numbers, he does predict a steady uptick in administrations over the months ahead.

Earlier last year, Moore Stephens said that the number of care home businesses falling into insolvency grew by 18% in a year, driven by a decline in local authority spending.