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U.K. Bankruptcies at Four-Year Low as Virus Aid Shields Firms

July 31, 2020, 1:23 PM

The number of companies filing for bankruptcy in the U.K. has fallen to its lowest level in four years as government coronavirus-support measures keep firms afloat, according to a new analysis by KPMG LLP.

In a statement Friday, KPMG said that 274 companies went into bankruptcy administration in the three months to end-June, 28% down from the previous quarter and the smallest number recorded since 2016. The government has introduced measures including paying the wages of staff furloughed, or temporarily laid off, to protect companies during the pandemic.

  • “Clearly government measures have had a dramatic impact,” Blair Nimmo, KPMG’s head of restructuring, said in the statement.
  • The fall in bankruptcies came despite a 19% fall in GDP between March and May, KPMG said. KPMG warned that many companies in sectors such as retail would go bust when the lockdown measures end.
  • KPMG analyzed bankruptcy figures from The Gazette, the U.K.’s official public record.

To contact the reporter on this story: Michael Kapoor in London at correspondents@bloomberglaw.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; Vandana Mathur at vmathur@bloombergtax.com

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