Interest rate rise ‘may send 200,000 firms into crisis’

An interest rate rise of just 1% could tip more than 200,000 businesses into administration across the country, Begbies Traynor warned today.

The insolvency practitioner claimed the number of companies suffering from “significant” distress has risen by 34% to 237,362 over the past year despite a recovery in the UK economy.

However, the number of businesses in “critical” distress fell 9% to 2,745.

Julie Palmer, partner at the firm, said: “It is crucially important that [Governor] Mark Carney exercises tightrope precision in his decision on the timing of interest rates rises if he wants the UK to return to more normalised conditions, without initiating an emergency stop on its economic recovery.”