UK Inflation Rockets To The Highest Level in Over 40 Years
Inflation in the UK has spiked to 9.1%, the highest level in more than 40 years.
Figures from May 2022 have revealed the soaring costs of gas, electricity, food and transport are having a dramatic impact on business cashflow as we feel the squeeze from the worsening cost of living crisis.
The recent hikes in interest rates, now up to 4%, have been an effort to curb the effects inflation is having on consumers and businesses alike. But inflation has continued to rise, making gains of 2% in just one month and a rise in interest rates is now exacerbating the cashflow problems caused by inflation.
We’ve previously explained that rising interest rates are placing more incentive on saving cash which could further shrink the economy and outstanding business loan and mortgage repayments will increase, adding further costs to businesses when cashflow is already being constricted.
A looming recession
The Bank of England warned of a recession earlier this month as they hiked interest rates to their highest level in over a decade.
The continued rise in energy prices is expected to push inflation above 10% by the end of the year, warning that household incomes would not keep up, placing an obstacle to consumer spend where businesses and the wider economy would suffer as a result.
The Small Business Index (SBI) from Q1 2022 revealed that successful finance applications for SMEs are at historic lows so less businesses are able to rely on borrowing to relieve the pressures of poor cashflow.
400,000 small businesses are currently at risk of closing their doors for good as a direct result of not being paid on time and more than half a million businesses are planning to either close, sell or downsize.
Businesses are currently chasing overdue invoices worth £61 billion, an increase of 22% in just one year with signs that the late payment crisis will only get worse as more companies struggle with cashflow to pay their suppliers.
Unlocking cash trapped in overdue invoices
We witnessed company insolvencies soar by almost 170% last quarter and the number of CCJs increased by more than 150%, a huge indication that insolvencies will spike further.
Company insolvencies place great strain on the credit cycle. Businesses who are owed money by companies that go insolvent risk writing these debts off, to the detriment on cashflow. Writing off large amounts of debts will mean these businesses will struggle to pay their own suppliers, causing a chain-reaction of unpaid invoices, further aggravating the late payment crisis.
If you have unpaid invoices now is the time to act and recover what you are owed and give your cashflow a much needed boost.
Here at Darcey Quigley & Co we have seen a rise of businesses needing additional help to recover overdue invoices this year that they thought would need to be written off as bad debt. Thankfully we’re able to help.
We currently have a 93% success rate recovering unpaid invoices, with all cases actioned within 1 hour. Our no-win-no-fee approach makes Darcey Quigley & Co a risk-free solution to recovering commercial debt. In 94% of cases, we also recover reasonable costs for debt recovery as well late payment interest and compensation!
Late payment interest – find out how much you can claim
The late payment of commercial debts act means you are eligible to claim interest and compensation on your overdue invoices.
Our free calculator will tell you exactly how much late payment interest and compensation you are eligible to claim in just 30 seconds.
Find out what you are owed here!
Meet our credit management and commercial debt recovery content writer, Declan!
With a keen eye for detail and a passion for educating others, Declan is committed to creating informative and engaging content that empowers readers to get a firner grasp of their credit control to improve their cashflow.
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