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Begbies Traynor Group PLC - Manchester-based corporate rescue and recovery practice - The latest 'Red Flag Alert' report, which is compiled by Begbies Traynor, finds a 25% increase in the number of UK companies in 'critical financial distress' from a year before. The 2,090 of companies in this category in the third quarter of 2022 is up 6.8% from 1,957 in the second quarter. The increase is led by the industry groups Bar & Restaurants, General Retailers, Leisure & Cultural Activities, and Media. Begbies Traynor also finds 610,000 companies in the less-severe 'significant financial distress' category, up 8% on a year before and 4% from the second quarter.
"After several years of volatility, the directors of businesses up and down the country are now facing very difficult decisions," comments Julie Palmer, a partner at Begbies Traynor. "They must decide whether to soldier on or give in, as they realise their businesses may not be viable if interest rates continue to rise as many economists expect."
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