Closing summary
Time for a recap.
England and Wales are on track for the highest quarterly number of company insolvencies since early 2009, officia data shows.
There was a 27% year-on-year jump in insolvencies in June, as companies struggled to handle higher interest rates, cost pressures, and the burden of repaying Covid-19 loans.
The pressures on households has eased a little, with grocery inflation dropping to its lowest level of this year.
Data firm Kantar reported that grocery price inflation has eased to 14.9%, the lowest rate since Christmas, as supermarket shoppers turned to the boom in loyalty card promotions.
UK mortgage rates have remained unchanged for the second day running, according to Moneyfacts.
Rightmove’s mortgage expert Matt Smith says tomorrow’s inflation data will be crucial for the market.
“Despite the rate rises we’ve seen this week, swap rates – the underlying costs of mortgages for lenders – have responded positively to the news that last week’s US inflation figures fell to a two-year low, and this has taken some pressure off lenders to increase rates further.
“Some commentators have said this may be the peak for mortgage rates, but the UK inflation data for June will be published tomorrow and will be key to what happens next with the pricing of fixed rates. The market is expecting to see inflation fall back in June, but as we’ve seen in the past couple of months, if it remains stubbornly high, and doesn’t fall in line with expectations, this could cause mortgage rates to rise further.
In other news…
ARK, an investor in Elon Musk’s Twitter, has written down their stake in the business by 47% as advertisers rein in their spending on the social media platform.
Bricklayers, plasterers and other construction jobs have been added to the government’s “shortage occupation list”, making it easier for foreign builders to come to Britain amid labour shortages partly caused by Brexit.
A leading thinktank has said that higher pay increases for public sector workers would not be inflationary.
The biggest investor in Thames Water has cut the value of its stake in the debt-laden utility company, which has faced questions over its financial stability and ability to raise crucial funds.
Labour mayors are launching legal action to prevent the closure of railway station ticket offices across England.
Pret a Manger returned to profit for the first time since 2018 last year as the launch of a subscription service helped the coffee and bakery chain bounce back after the Covid crisis.
And…shares in Ocado are up almost 20% today after it reported a return to underlying profits, and a 59% jump in revenues from its Technology Solutions arem.
UK on track for most company insolvencies since 2009
England and Wales are on track for the highest quarterly number of company insolvencies since early 2009, Reuters has spotted.
Insolvency Service figures show that over the three months to the end of June, there were 6,403 companies declared insolvent. If this figure is confirmed when official quarterly numbers are published later this month, it would be the highest non-seasonally-adjusted calendar-quarter total since the first quarter of 2009.
That shows the struggle businesses are facing to repay Covid-19 loans against a tough economic backdrop, leading to June’s 27% jump.
Gareth Harris, a partner at RSM UK Restructuring Advisory, says:
“The monthly figures confirm what we are seeing on the ground - that UK corporates are struggling to cope with a challenging combination of rising interest rates, sticky inflation, higher wage expectations whilst recovering from a hangover of Covid debt.
UK on track for most company insolvencies since 2009 https://t.co/iMe2RIsLfo pic.twitter.com/ZXB22xJ8B6
— Reuters (@Reuters) July 18, 2023
