The amount of London-based businesses reporting serious financial difficulty has risen by 17 per cent year-on-year, according to Begbies Traynor.

The consultancy’s regular ‘Red Flag Alert’ research found that in the second quarter this year, 472,183 businesses across the UK were experiencing ‘significant’ financial distress at the end of June 2018, up nine per cent compared to the same stage last year, but down one per cent compared to the previous three months of this year.

Breaking down into sectors, retailers made up 30,574 of the total, with those in financial difficulty up four per cent during the second quarter.

According to the research, 251,495 UK businesses ended the period in a position of negative net worth, while 109,717 demonstrated a considerable increase in their working capital deficit – both key indicators of financial distress.

Julie Palmer, partner at Begbies Traynor, said the outlook for certain industries is looking increasingly uncertain. “The problems facing High Street retail have been well documented of late, with the recent epidemic of CVAs and store closures being just the tip of the iceberg,” she stated.

Figures from EY yesterday revealed 20 profit warnings from FTSE-listed retailers in the first half of 2018, double the number issued in the same half-year period in 2017. The consultancy suggested rising operational costs from labour, high business tax rates and the switch to online shopping were all straining retailers.

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