More than 55,000 UK firms in severe distress, research shows

Over 55,000 companies in the United Kingdom are facing severe financial distress, with a significant increase observed in the third quarter of 2025 compared to the previous year. Research indicates a 78% rise in firms in critical financial distress, totaling 55,530, and a 12.6% increase from the quarter ending in June, signifying a rapidly deteriorating economic environment for businesses. This surge in distress is particularly acute in consumer-facing sectors, including leisure and culture, hotels and accommodation, and retail, which have experienced jumps of 96.7%, 92.5%, and 85.6% respectively. These businesses are grappling with mounting pressures from rising labor costs and increased inflation. Beyond critical distress, the number of companies in significant financial distress also rose by 14.8% year-on-year. Experts are urging the government to provide urgent support through the upcoming autumn Budget to pr... download the app to read more