27JUL

Company failures fell to 44% of 2008 peak

2 min read

11:11UTC

The company insolvency rate fell to 50.5 per 10,000 companies in the year to June 2026, down from 52.4, against a 2008-09 recession peak of 113.1.

← Back to The distress moved from banks to councils Jump to analysis ↓

EconomicDeveloping

Key takeaway

British companies are failing at less than half the 2008-09 rate, and the rate is still falling.

The Insolvency Service put the company insolvency rate at 50.5 per 10,000 companies in the year to 30 June 2026, down from 52.4 ¹. That is roughly one company in 198 failing across those twelve months. The 2008-09 recession peaked at 113.1 per 10,000, so the current rate sits at 44.7% of that peak, and it is still falling.

The number of companies registered in Britain has grown for years, which is why the rate rather than the count is the honest measure. A rising raw tally of failures can sit happily alongside falling distress; report the tally and you manufacture a crisis out of arithmetic. Any headline about record company failures that does not divide by the number of companies is measuring the wrong thing.

The Insolvency Service publishes the household and corporate figures on the same day, on the same twelve-month basis, and they point in opposite directions: businesses failing less often, individuals failing more often. That pattern fits an economy where employment holds up, firms have absorbed the interest rate cycle, and the pressure has landed on personal balance sheets through prices and tax rather than through job losses. Our declared trigger on the corporate ledger is a rate back above 60.0 per 10,000, which would take a genuine turn rather than a wobble to reach.

Deep Analysis

In plain English

A company insolvency rate measures how many companies out of every 10,000 in existence formally failed over a year, rather than the raw number of failures, which matters because there are simply more companies today than in past decades. At 50.5 per 10,000, roughly 1 in every 198 companies became insolvent over the past year, well under half the rate seen during the 2008-09 financial crisis (113.1 per 10,000), and the rate is still falling rather than rising.

What could happen next?

Opportunity
The corporate insolvency rate at 44.7% of the 2008-09 peak is genuine evidence against reading the UK's overall fiscal position as a repeat of that crisis.
Risk
If lender forbearance is masking distress rather than resolving it, a future tightening in credit conditions could produce a delayed jump in the insolvency rate rather than the gradual pattern seen so far.

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: The 2008-09 recession, when the company insolvency rate peaked at 113.1 per 10,000, is the explicit benchmark this ledger uses; today's rate of 50.5 sits at 44.7% of that peak, a genuine and measurable distance rather than an assertion.

Counter-parallel: The 2020 pandemic period saw company insolvency rates artificially suppressed by government support schemes and a moratorium on winding-up petitions, only for insolvencies to spike once support was withdrawn. That precedent is the reason forbearance-driven suppression, rather than genuine resilience, remains a live counter-reading of today's falling rate.

The Insolvency Service tracks a rate, not a raw count, precisely because a rising number of company failures can coexist with a falling rate once the total number of companies in existence keeps growing.

The 2008-09 peak of 113.1 per 10,000 and today's 50.5 are directly comparable on that rate basis, in a way raw insolvency counts across the two periods would not be.

Consensus view: R3, the insolvency and restructuring trade body, and most corporate credit analysts read the fall to 50.5 per 10,000 as evidence that higher interest rates have not produced the wave of corporate failures some forecasters expected when rates first rose, since companies with weaker balance sheets have generally already exited or refinanced.

Counter-view: Some restructuring advisers caution the rate can fall even as distress rises, if lenders are choosing forbearance (extending or restructuring debt privately) over formal insolvency to avoid crystallising losses on their own books, meaning the published rate may understate the number of companies that are functionally insolvent but not yet formally declared.

Key tension: Whether the falling rate reflects genuine corporate resilience, or lender forbearance that defers rather than prevents the eventual insolvency event.

Sources:Insolvency Service

Mentions:Insolvency Service →

First Reported In

Update #1 · The distress moved from banks to councils

Insolvency Service· 27 Jul 2026

Read original →

Different Perspectives

Institute for Fiscal Studies

The IFS puts about £25bn a year of the government's defence spending path still unfunded against plans announced so far, and separately relays the OBR's costing of the triple lock at £15.5bn a year by 2029-30, roughly triple its original £5.2bn projection. It presents both as fiscal arithmetic, not policy recommendation.

Chartered Institute of Public Finance and Accountancy

CIPFA treats the rise in council capitalisation directions, 18 authorities in 2024-25 to 36 for 2026-27, as evidence Exceptional Financial Support has stopped being an emergency backstop and become a routine budgeting tool. It wants a resolution regime for councils comparable to the one banks already have.

Resolution Foundation

The Resolution Foundation projects typical non-pensioner incomes rising 1.2% in 2026-27, and 4.7% for the poorer half of non-pensioner families, before frozen tax thresholds and rising council tax and housing costs erode those gains later in the decade. It reads the tax route out of Britain's debt position as one that falls unevenly on households rather than on the state.

Institute of Economic Affairs

The IEA argues total managed expenditure averaging 44.5% of GDP through the decade is unsustainable, and that holding spending growth to inflation until 2029-30 would improve the fiscal position by £40bn. This is a campaigning position from the free-market right, not a costed forecast like the OBR's.

Elliott Management and Apollo Global Management

The two creditors behind the London & Valley Water consortium offered Thames Water £3.35bn of new equity and £3.25bn of fresh debt on 21 July 2026, betting the regulated utility is worth owning before Ofwat, a public consultation or the High Court sign off. They will still bid even if the company enters the Special Administration Regime first.

Bank of England

The Bank of England judged UK banks resilient to a severe hypothetical recession in its 2025 stress test and cut their required capital buffer by 100 basis points to 13% in December 2025. It expects that resilience to hold even as councils, universities and NHS systems face far harder settlements.