A sharp drop in the quantity of debts owed by firms in liquidation in the East Midlands, as well as a decrease in insolvency activity in the region, hint at glimmers of recovery for the local economy as businesses head into 2026.
According to the Midlands branch of R3, the UK’s restructuring, turnaround and insolvency trade body, levels of debts owed by businesses in liquidation in the East Midlands fell by 27% in November compared to October, while insolvency activity, which includes administrator and liquidator appointments as well as creditors’ meetings, dropped by 24%.
Local entrepreneurs, however, remain wary as R3 Midlands’ figures, which are based on an analysis of data from business intelligence provider Creditsafe, also highlight a steep decline of 22% in the number of companies set up in the East Midlands in November.
R3 Midlands chair Stephen Rome, a partner at law firm Penningtons Manches Cooper in the region, said: “It’s encouraging to see some improvements in cashflow conditions, but local businesses have been battling against significant economic challenges for over five years now and market barriers to entry are high.
“Sector-specific pressures are particularly evident as we approach the Christmas period, with retailers, for example, contending with weaker sales as consumers hold back on purchases in favour of last-minute discounts.
“For leisure operators, the upcoming festive trading season will be pivotal as they market themselves against a backdrop of lower high street footfall and fragile consumer confidence.
“Ultimately, however, it remains to be seen whether the December trading period will provide a much-needed boost for local firms or the final blow. It’s critical, therefore, that business owners are alert to any signs of financial distress and act on them promptly.
“There is a significant amount which can be done to rescue and support companies and individuals if professional help is taken early enough.”
