Insolvency activity rises amid growing geopolitical uncertainty

R3, the UK’s trade body for restructuring, turnaround and insolvency professionals, has responded to the latest monthly insolvency statistics for England and Wales, which show an increase in both corporate and personal insolvencies in February. Rising geopolitical tensions are now adding further risk to an already fragile economic environment.

Corporate insolvencies increase as uncertainty grows

Corporate insolvencies increased by 7% between January and February 2026, rising from 1,749 to 1,878. However, February 2026’s total was 7% lower than in February 2025, so although an increase from the previous month insolvencies remain on the same level as the previous year.

These cases consisted of:

• 249 compulsory liquidations
• 1,473 creditors’ voluntary liquidations (CVLs)
• 146 administrations
• 10 company voluntary arrangements (CVAs)

Although these figures pre-date the recent escalation of conflict in the Middle East, rising energy and fuel prices are already feeding through into operating conditions, creating a potentially volatile start to the quarter.

Sectors with thin margins or high energy usage, such as hospitality, are likely to be among the most exposed in the coming months.

Geopolitical tensions threaten emerging stability

The latest increase in corporate insolvencies reverses recent signs of stabilisation, with escalating geopolitical uncertainty expected to weaken consumer spending, dampen business confidence and slow investment decisions. This uncertainty also reduces the likelihood of an imminent interest rate cut when the Bank of England meets later this week, contributing to a more fragile overall economic outlook.

Personal insolvencies continue to rise

Personal insolvencies increased by 6% in February 2026 compared to the previous month, rising to 11,609 from 10,949. Personal insolvencies were 18% higher than in February 2025, when the figure was 9,861.

These cases consisted of:

• 4,210 debt relief orders (DROs) – the highest since their introduction in 2009
• 768 bankruptcies
• 6,631 individual voluntary arrangements (IVAs)

Tom Russell, President of R3 and Director in our Turnaround, Restructuring and Insolvency team, commented: “The increase in the number of debt relief orders (DROs) shows that many households are really struggling to make ends meet. The prospect of inflation increasing at a faster rate than expected because of the Middle East conflict comes on top the already high cost of everyday living. Any sustained rise in inflation will make it harder for people to balance their finances, especially those with little financial resilience.”

During periods of financial pressure like these, early advice can make a real difference.

Our Turnaround, Restructuring and Insolvency team works closely with businesses to stabilise cashflow, protect value and support recovery. Find out more about how we can help here.