The number of company insolvencies dropped by 6% in the 12 months to July 2023, HMRC statistics reveal.

There were 1,727 insolvencies last month compared to 1,931 in July 2022, which is still higher than levels seen pre-pandemic.

Insolvencies were down by 22% compared to June 2023, when 2,169 companies closed their doors.

However, an increase in winding-up petitions by HMRC saw 248 compulsory liquidations in July - 81% higher than the 137 total a year prior.

Creditor's voluntary liquidations were also 17% lower than in July 2022, standing at 1.336 from 1,608.

Responding to the figures, Nicky Fisher, president of R3, said: "Economic issues continue to bite businesses".

"Costs are rising at a time when people are cutting spending back, leaving businesses facing the challenge of squeezed margins and shrinking revenues and having to work out whether to absorb their cost increases or pass them onto their customers.

"Alongside these, requests for wage increases, and higher energy bills are also hitting businesses hard as the costs of cooling premises in the summer are just as challenging as keeping them warm in the winter."

Fisher also urged directors to be "vigilant to the signs of financial distress and act if any of them present themselves".

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