More than three companies are failing daily in the United Kingdom, according to an analysis of official figures by bankruptcy specialist Kroll. In the first half of 2026, 649 firms entered administration, a 6% increase compared to the same period last year. This trend appears to challenge recent assertions by Chancellor Rachel Reeves that the economy is strong and that her policies have 'beaten the odds'.
The report suggests that British businesses are under pressure, partly due to approximately £75 billion in tax increases implemented since Ms. Reeves assumed the role of Chancellor two years ago. The Resolution Foundation, a left-wing think tank, has offered a critical assessment of the government's economic management, noting that Ms. Reeves has enacted more tax rises than any other Chancellor on record, despite her relatively short tenure.
Furthermore, the think tank warned that the labor market has weakened under the current administration. Unemployment has risen to nearly 5%, and the number of individuals aged 16 to 24 not in education, employment, or training (NEETs) has surpassed one million. The increase in employer National Insurance contributions, business rate reforms, inheritance tax on family firms, and higher minimum wages and green energy levies have contributed to increased costs for businesses. The recent rise in oil prices, driven by intensifying conflict in the Middle East, poses an additional threat to economic stability.
Official figures released last month revealed a 0.8% drop in disposable household incomes in the first quarter of the year after accounting for inflation. The metric for real household disposable income per head, a target for Prime Minister Keir Starmer, has declined in four of the last five quarters and is now lower than when the current government took office.
Despite these indicators, Ms. Reeves, speaking at her Mansion House dinner, maintained that the economy is robust due to the policy choices made by her government. She stated that investment, productivity, and wages have all increased. However, many businesses and households report different experiences, with inflation rising from 2% to 2.8% since Ms. Reeves became Chancellor and unemployment increasing from 4.1% to 4.9%. The number of employed individuals has also fallen by 155,000.
Industry figures have expressed concern. Hotelier and entrepreneur Steve Perez, founder and CEO of Global Brands, commented that the tax burden in the UK has become unsustainable, with decisions on national insurance, business rates, and inheritance tax placing significant pressure on businesses and ultimately impacting jobs. He expressed hope that a future Chancellor would better understand the need to support businesses for effective economic growth.