The company was insolvent in June, but the UK economy remained under pressure
The number of British companies fell sharply in June, bringing respite moments for businesses after months of economic turmoil.
But experts warn that the decline may only be temporary, with continued pressure threatening a wave of financial distress later this year.
According to the bankruptcy service, 2,043 registered companies went bankrupt in June 2025 in England and Wales, down 8% from May (2,230) and 16% (2,430) from June 2024.
The decline in bankruptcy could alleviate some concerns about the health of the UK economy, which continues to struggle with inflation, tax pressures and a fragile global background. However, data for the first half of 2025 show that despite being lower than the 30-year record in 2023, the bankruptcy rate is still slightly higher than the second half of 2024.
In June, bankruptcy type breakdowns included voluntary liquidation (CVL) of 1,585 creditors, 332 mandatory liquidation, 111 committees and 15 companies’ voluntary arrangements (CVAS). No appointment was taken over.
Paul Williams, a restructuring partner of PKF Littlejohn, said the fall in June should be welcomed, but did not draw the full photo.
“As global and domestic markets remain unstable (due to international conflicts and economic destruction), the UK economy remains under enormous pressure,” Williams said.
“Although bankruptcy figures show a decline in June, the first half of 2025 has generally risen compared to the second half of last year.”
He cited the ongoing disruptions to provide chain stores, fluctuations in U.S. tariff policy, inflationary cost pressures, and changes in insurance contributions to employers’ national insurance, which are ongoing headwinds for businesses.
Williams added that despite the encouraging decline in bankruptcy, “for British clubs it remains “stay away from clean and healthy bills”, urging companies to remain agile, actively manage risks and maintain strong financial discipline.
The broader economic outlook remains uncertain. Inflation unexpectedly rose to 3.6% in June, raising questions about the resilience of consumer demand and already tight profit margins, especially in retail and hospitality.
Meanwhile, GDP grew 0.7% in the second quarter and employment levels increased, providing potential signs for Green Buds. In her recent speech at the mansion, Prime Minister Rachel Reeves reiterated the government’s commitment to reform aimed at promoting growth, reducing traditional Chinese tape festivals and encouraging investment.
However, critics remain skeptical. David Hudson, FRP’s restructuring consulting partner, said many businesses still face “hard times”.
“The slight decline in bankruptcy has brought a touch of relief to people, especially for hospitality and retail, which is now benefiting from the record summer weather,” Hudson said.
“But this may be just a pause. Consumer confidence remains low, growth remains weak, and inflation continues to erode profit margins.”
Hudson warned that many businesses may survive only a substantial cut and no continued demand recovery or a drop in input costs, so probation may be short-lived.
As the government approaches the next fiscal cycle, businesses continue to digest the impact of changes in tax policy, analysts say the business community will need to remain vigilant.
While the decline in bankruptcy rates in June provided welcome news, experts believe the pressure on businesses is far from over and for many, the path to stability will depend on challenges before escalating.
Currently, it is recommended that companies closely manage cash flow, review supplier relationships, and seek early guidance from consultants to avoid gliding in an economic environment that is still unstable.
