29: GDP decline as recession looms

The UK economy unexpectedly declined in August by 0.3%, reinforcing predictions that it will fall into a recession later this year. The surprise drop came as factories and consumer-facing businesses struggled the most. Prices are rising at their fastest rate for 40 years and outpacing growth in pay, so consumer-facing businesses will feel the impact of tightening purse strings the most.

The number of companies filing for administration jumped 50% (265) in Q3 2022, as economic headwinds continued to wreak havoc on businesses up and down the UK. Interpath suggests by the end of Q4 this year insolvency levels will have risen even further. Interest rates are highly likely to be above 5% by April next year, putting increased pressure on cashflows for businesses with high debt levels - so increased numbers of administrations are expected...