U.K. Says Business Closures Surged 43% in Second Quarter

(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

The number of U.K. businesses that closed and ceased trading surged 43% from a year ago in the second quarter, the most in at least four years in a sign of the damage the pandemic is inflicting on the economy.

The Office for National Statistics counted more than 105,000 businesses removed between April and June from the Inter-Departmental Business Register, a list of all businesses registered to pay value added taxes and levies on wages. The surge is partly due to difficulties companies had filing for insolvency a year ago during the pandemic, according to Josh Martin, an economic adviser for the ONS.

The figures from a new research from the ONS are aimed at delivering a sharper view of which companies were pushed past the brink than the insolvency numbers, which make up a smaller fraction of business closures.

The largest increases in business closures in the second quarter were in professional, scientific and technical activities.

The number of new businesses created and added to the register in the second quarter surged 28% compared to last year, but is nearly identical to pre-pandemic levels for the same period. Closures were up 10% from 2019.

©2021 Bloomberg L.P.