INSOLVENCY experts in Hampshire have warned that the business climate is still harsh.

They have spoken out following the announcement that business failures in England and Wales have leapt by 64% - from 864 in October 2020 to 1,405 last month.

Insolvency body R3 said the new figures showed that businesses should seek advice at the first sign of difficulties.

Garry Lee, chair of R3’s Southern and Thames Valley region, which includes Hampshire and Dorset, said: “The business climate is still harsh.

“Economic growth is slowing, costs are rising, and consumer confidence is falling.

“Although consumer spending is higher than it was this time last year, rising Covid case numbers and sharp energy price rises have meant many businesses aren’t seeing the benefits.

“As we move closer to Christmas, we would urge company directors in Hampshire and Dorset to be mindful of the signs of business distress, which include cashflow issues, problems paying staff or suppliers and increasing stock levels.

“Anyone in Hampshire or Dorset who is concerned or anxious about their business or personal finances should seek help from a qualified and regulated advisor as soon as possible.

“Early advice gives you more potential options and more time to make a decision about what’s best for you.

“Most insolvency professionals will give you an hour of their time for free to explain your situation and outline and discuss your potential options.”

Figures from The Insolvency Service for October 2021 show that corporate insolvencies rose by 63.6%, from 864 in October 2020 to 1,405 in October 2021. Month on month, they fell by 3% from 1,449 in September 2021 to October 2021.

Personal insolvencies fell by 3% to 9,668 in October 2021 compared to 9,966 in September 2021, and were 19.2% lower than the October 2020s figure of 11,960.

The month-on-month fall in corporate insolvencies from September to October was driven by a reduction in the number of Creditors’ Voluntary Liquidations.

However, there were still twice as many companies entering this type of procedure than the same time last year and nearly 20% more than in 2019.

Garry, who is an associate director in the recovery and restructuring services department at accountancy firm Smith & Williamson’s Southampton office, said: “This would suggest there are still a fair number of company directors who are choosing to close their businesses after deeming post-pandemic success unlikely.”

Although showing a leap from October 2020 to 2021, overall corporate insolvencies were still 5% lower than in October 2019 when they stood at 1,485.

This may suggest the government’s support measures have helped prevent the economic consequences of Covid from translating into even higher levels of corporate insolvency.

For personal insolvencies, the month-on-month and year-on-year falls were driven by a reduction in all types of procedure.