Firms in distress fall as Britain holds nerve after vote on EU

British businesses have held their nerve so far since Brexit, with corporate levels of “significant” financial distress falling by 6% over the past three months.

The figures, from insolvency firm Begbies Traynor, also showed that the number of UK businesses in significant financial distress was down 2% compared to the same quarter a year ago.

The construction sector enjoyed the most improved financial health in the three months to October, with saw an 11% drop in firms in significant distress.

The industry has bounced back from the Brexit shock: in July construction activity initially shrank at its fastest pace since 2009. It is set to benefit from recent policy announcements including the £3 billion Home Builders Fund, plans to accelerate construction on public land and use more brownfield sites.

Professional services firms also had a buoyant quarter, with the number of firms in significant financial distress down 10% to 11,745.

Ric Traynor, Begbies’ executive chairman, said: “It is still too early to tell what longer term impact the ‘Leave’ decision might have on the UK economy. Clearly though, the stronger the UK economy becomes pre-Brexit, the better it will be able to withstand any post-Brexit shocks.”

Partner Julie Palmer added law firms and consultancies enjoyed a boost from firms dealing with Brexit. 

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