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Eversheds comment: Brexit uncertainty and rising inflation could increase corporate distress

  • United Kingdom
  • Europe

    28-10-2016

    On the release of UK company insolvency statistics for July-September 2016, Simon Waller, head of the finance and restructuring group at Eversheds, comments:

    “Company liquidations remain at an historic low, perhaps because the full effects of Brexit are yet to be felt. This quarter’s post-referendum slight rise in company insolvencies is likely to be purely coincidental.

    “Liquidity is currently high. However, if uncertainty continues over the route the UK’s exit from the EU will take, and with the weakness of sterling placing pressure on importers, corporate distress is likely to increase – especially if these factors cause liquidity to sit on the sidelines. Additionally, rising inflation could prove a real challenge next year.”

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