The quadrupling of interest rates since December has tipped thousands of companies into insolvency, with a 30 per cent spike in the last three months.

Almost 6,000 firms have gone down according to Mazars, the audit and tax specialists, up from 4,578 inn the previous three months.

This comes after the Bank of England raised interest rates four times in a  row in a bid to stem inflation, with the latter set to pass double figures in the near future.

A significant number of insolvencies happened in May, with 1817, which was a rise of 79 per cent from the same time in 2021.

Mazars said a major factor in the trend was interest rate rises as it meant debts were harder to service, and some have not been able to cope.

“These figures suggest that just as the cost-of-living crisis is hitting consumers, it is doing the same for businesses”, said Rebecca Dacre, a partner at Mazars.

“Businesses are being hit from both sides by rising costs and falling consumer spending. Those that were already struggling have started to become insolvent.”

“Figures showing an economic contraction in the most recent month do not bode well for businesses that are close to the water line. Unfortunately, there may be more pain to come and little let-up for some businesses.”

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30 per cent spike in insolvent companies as firms hit by rising costs and falling consumer spending