Insolvencies are predicted to rise dramatically in the UK as business grapple with shifting economic tides and the US tariffs threatening the global economy, Interpath analysts say.

While the number of companies filing for administration in the UK stayed steady in the first quarter of 2025, this is expected to change as the consequences of certain economic policies take hold.

Analysis of Companies House data by Interpath, the international advisory firm, shows that in the firs three months of 2025, there were 330 administrations.

Compared to the first quarter of 2024, this was just a small increase (321), and just a small decline from the final quarter of 2024 (337).

A range of companies have been affected by the shifting economic headwinds – Encino Trading Services suffered due to supply chains pressured from the war in Ukraine, and Technicolour entered administration following rising labour costs from the Hollywood strikes.

“The latest insolvency figures reflect the period of relative stability we’ve had in the UK after a steady stream of administration cases over the past year. But now, economic protectionism means that the storm clouds are gathering after months of fair skies,” Will Wright, CEO of Interpath in the UK, said.

“The universal tariff imposed by the US has sent shockwaves round the globe and has knocked corporate confidence. Quite simply, UK plc is unnerved. We’ve already seen that come through in volatility in the markets.

“Together, this may mean that we see expansion plans put on ice and a reduction in capex and technology investment. Management teams are concerned by the effect these changes will have on their own trading and margins, but also the stability of supply chains and medium-to-longer term health and demand within economy.

“Unless the UK can ratify a bespoke deal quickly, we should expect a notable rise in administration levels in sectors such as industrial manufacturing and automotive through the summer ahead, with the indirect effects of the tariff hike to hit services further down the line.

Recommended reading

• Can Europe ‘Trump-Proof’ Its Cloud Services?
• Trump’s Tariffs to Tank IT Spending, IDC Warns
• Sketchy Regulation and Legalese Top Emerging Risks for Q1 2025

“The timing couldn’t be tougher as so many businesses should be ramping up investment right now as we pass through a period of fundamental structural change in the economy which has been upended by the rapid emergence of AI.”

The data shows an even pattern of administrations across different sectors, with retail marginally ahead (43), followed by building and constructin (42), business services (42), and leisure and hospitality (29).

Scotland had 14 administrations in the first quarter of 2025, a slight year on year rise (12 in 2024 Q1), but just less than the 15 seen in the previous quarter.