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The level of business insolvencies remained at pre-crisis levels during 2016 – though an increase in the final quarter was the first in five years, according to statistics from the Insolvency Service released today.

While insolvencies are now lower than before the financial crisis, 2017 could be more challenging, according to Richard Wolff, the North West Chair of the insolvency and restructuring trade body R3.

The 2016 figures were skewed by the inclusion of almost 1,800 interconnected companies but excluding these, they show that there were 14,706 company insolvencies in 2016, broadly unchanged from the year before.

Richard Wolff, who is also Head of Corporate Recovery and Insolvency at law firm JMW, said: “Despite a number of challenges for businesses in 2016 – the fall in the value of the pound since June’s EU referendum and the introduction of the National Living Wage among them – there is still a lot of downward pressure on corporate insolvency numbers.

“Businesses are enjoying a significant safety net: patient creditors, record-low borrowing costs and an increased focus by the insolvency and restructuring profession on early intervention. R3’s regular surveys of business distress have found that key signs of business distress are near their record lows.

“The fall in the value of the pound since the summer will undoubtedly have been a shock to some smaller businesses though – almost half our members have said Brexit has come up in discussion with struggling businesses since June.

“After half a decade of falling insolvencies, insolvency levels are lower now than they were even before the financial crisis. However, the decline now seems to have stalled and we’ve had the first increase in insolvencies since 2011.

“2017 will be an important test: many larger firms will have been protected from the pound’s fall by currency hedges or long-term fixed-price contracts, but these will unwind or end this year. Businesses have been buoyed by resilient consumer spending since the EU referendum but much of this is on the back of increased borrowing – it’s not clear how sustainable this will be.”

The figures show the number of individuals becoming insolvent rose in 2016 but remained at its second-lowest level in 11 years. During the year, 90,930 entered an insolvency procedure, up by 13% in 2015.

Richard Wolff said this was because of easier access to personal insolvency procedures. “It’s not necessarily that more people have needed a personal insolvency procedure, but that more people are able to enter a debt solution appropriate to their situation.”