1 in 3 British businesses in financial trouble

As the UK grapples with 2025’s harsh economic realities, recent analysis by Plimsoll indicates that just over 1 in 3 British companies are at heightened risk of failure in the next 12 months. With the Trump 2.0 ‘America First’ administration challenging the neoliberal global order and many of the promised benefits of Brexit proving illusory, British business leaders face an uncertainty not experienced since the dark days of Covid. 

Unfettered access to key markets is no longer guaranteed. Supply chains can’t be relied on, especially for just in time processes. Trained staff are increasingly difficult to source. Input inflation seems to only be heading higher.  

According to Plimsoll, which applies its predictive model across 1,600 markets, the result of this perfect storm is that 38% of British businesses are heading into this growing uncertainty already in financial danger—up 4% on from 34% the previous year. 

Historically, businesses that encounter unforeseen deteriorations in trading conditions on an already weak footing have been the most vulnerable, and this trend shows little sign of abating. Indeed, the risks appear concentrated among larger firms, with 41% of businesses holding over £50 million in assets now classified as financially "in danger" by Plimsoll. These companies are those most likely to serve international markets, are the most exposed to deterioration in trading conditions overseas. 

In contrast, smaller enterprises, though not immune to macroeconomic pressures, seem more resilient. SMEs, which tend to rely on more agile operations and localised markets, have weathered recent challenges better than many anticipated. However, retail and consumer-facing industries remain exposed to the pressures of rising costs, tight labour markets, and potentially higher taxes. 

Plimsoll’s research suggests that, in times of economic turbulence, early intervention can mean the difference between survival and failure. It warns that many of the companies identified as high-risk need to quickly boost shareholder capital or improve operational efficiency to stay afloat. The cost of inaction? Potential collapse. 

Yet, the picture is not universally bleak. Plimsoll reports that the share of businesses rated as "Strong" held steady at 48%, illustrating that some companies are not only surviving but thriving despite the headwinds. As with any prevailing economic landscape, there are winners and losers. The key takeaway from the latest round of economic news is clear: well-managed firms endure, while those that fail to adapt risk becoming casualties of the evolving economic landscape. 

To find out which companies are in your market are in most financial jeopardy, visit www.plimsoll.co.uk and search for your market today.