UK Firms in Distress Surge as Taxes, Rising Costs Take a Toll

The number of UK businesses in “critical” financial distress is surging as firms grapple with an increased tax burden, unpredictable economic outlook and rising costs, according to insolvency specialist Begbies Traynor.

Corporate distress increased 43.8% in the fourth quarter compared with a year earlier, and all 22 sectors covered by the firm’s proprietary Red Flag Alert tracker saw a deterioration in their financial health. Distress was up 21.3% compared with the previous quarter, Begbies Traynor said in a report published Thursday.

“The continued rise in critical financial distress is clearly concerning for the UK economy,” said Ric Traynor, ...