Administrations Rise Due to Cost Pressures and Uncertainty

Stats released today by The Insolvency Service reveal that administrations were 44% higher than in July 2026, and 60% higher than in August 2025. Administration numbers have been volatile in recent months, driven by over 250 connected companies in the Real Estate sector entering administration.

The number of compulsory liquidations in August 2026 was 8% higher than in July 2026 and 5% higher than in August 2025. The average monthly number of compulsory liquidations in the first eight months of 2026 was 5% lower than the 2025 monthly average.

Giuseppe Parla, Restructuring & Insolvency Director at Menzies LLP, says the rise in administrations in August sits atop a surface of improving GDP, however continuing geopolitical uncertainty continues to put mounting pressure on costs, and with neither showing signs of easing, more British businesses are likely to follow:

“Below the surface of an improving GDP, renewed conflict in Iran and its economic fallout continue to push up energy, fuel and supply chain prices, and inflation. For businesses already managing tight margins, these are pressures that are becoming increasingly difficult to absorb, which poses a significant threat to the British economy and risks further elevations in company insolvencies if left unresolved.

While UK hospitality saw a summer uptick in confidence following a cut to business rates and record temperatures, sector costs continue to rise, compounding years of gradually increasing pressure on traders. Further uncertainty has been added to the mix by the announcement of the tourist tax, and ongoing debate over bans on ‘vertical drinking,’ both of which could risk decreasing pub, restaurant and hotel revenues, particularly in crowded cities.

As we sit a month away from the Budget, many businesses are already holding their breath amid rumoured tax hikes and price rises which will determine their ability to break even in an unpredictable economic climate. All eyes now turn to the Chancellor to set out how this Government plans to restore confidence and financial stability, with firms looking for a defined roadmap that provides clarity on growth, tax pressures and shifting international trading rules. For some, this wait alone could be the difference between survival and failure.

Seeking support is a difficult conversation to have, but as ever, our message to firms is to use the coming month to review their finances and take expert advice at the first sign of distress. Doing so early increases the chance that they will be ready to adapt to new economic conditions and policies, and opens more options to protect value, preserve jobs and secure long-term financial viability.”