Read more: See hereIndustry experts are warning that insolvencies and restructuring may surge in early 2025 as businesses face mounting cost pressures.
Businesses are bracing for a hit to their bottom line as they face hikes in National Insurance contributions, an increase in the minimum wage, and other tax rises. These measures were unveiled by Chancellor Rachel Reeves in the autumn Budget to bolster spending.
Ms Fisher commented: ⁘With the changes to employer National Insurance and National Minimum Wage being introduced in April, the next three months will be critical for firms in these industries and others as they work out how they will manage the impact this additional cost will have on their finances.⁘
She also noted: ⁘This could lead to an uptick in restructuring work in the first quarter of this year or a rise in corporate insolvencies between March and June – but at this stage it's too early to tell which of these outcomes is most likely.⁘
Meanwhile, Benjamin Wiles, managing director of restructuring at Kroll, remarked that the outlook for next year is ⁘still uncertainty⁘ acknowledging that while increased costs for firms may be partly balanced by stronger consumer finances due to rising wages, there's been a surge in activity in the construction sector which could persist into 2025 given high borrowing costs.
David Kelly, a partner at PwC, added: ⁘The year ahead is poised to bring fresh challenges, including navigating the implications of the Autumn Budget measures and responding to the evolving actions of clients and suppliers. Ongoing resilience is needed across the corporate sector to weather these pressures.⁘
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