Number of firms experiencing financial distress in Yorkhsire lifts

second quarter of 2026.

A number of regions – West Midlands, Wales and Borders, Northern Ireland, Yorkshire, the South East and London showed small, less than 2.6 per cent increases in distress, while Scotland, the South West, the North East and the North West showed small less than 1.6 per cent decreases in the numbers of distressed companies.

East Anglia showed a 21 per cent decrease in distressed companies.

It came despite the number of insolvencies declining in Q1-Q3 2026, compared to the same period in 2025.

Milly Camley, CEO at The IFT, said: “UK businesses continue to operate in an environment of sustained economic and geopolitical uncertainty, but the report also demonstrates their underlying resilience and the value that effective turnaround can preserve.”

Wholesale, retail and repairs; construction; and professional, scientific and technical activities remained the most distressed sectors, with financial and insurance businesses showing one of the highest increases in distress.

Inflationary pressures, leadership, bandwidth and energy prices were identified by IFT

independent members as the top three challenges for distressed but viable businesses in

2026.

Distress increased most in public administration, defence, and social security, lifting by 11 per cent year-on-year in the second quarter.

Distress in the financial and insurance activities sector lifted by eight per cent and manufacturing five per cent per cent, from Q2 2025 to Q2 2026.

It came as distress reduced in accommodation and food services by one per cent, arts entertainment and recreation by three per cent and education by five per cent from Q2 2025 to Q2 2026.

Operational change was also widespread, with 67 per cent of IFT independent members changing a business’ organisational structure in their most recent successful assignment.

The most common interventions over the last year reported by IFT independent members

were cost reductions, cash flow forecasting, and helping boards create strategic change.

According to the report, 93,972 estimated jobs were preserved by IFT independent members from 2025 to 2026, with over £4.04bn estimated shareholder value increased by IFT independent members in the same period.

Ms Camley added: Businesses cannot always wait for certainty before acting. Early responses to challenges can protect jobs, skills and productive capacity, while giving viable companies a stronger platform for future growth.

“Turnaround should therefore be recognised not simply as a response to distress, but as an essential part of the UK’s approach to productivity, growth and economic resilience, including national priorities such as reindustrialisation, housing delivery and technological development.”

Claire Burden, Chair at The IFT, said: “This report shows that, despite persistent pressure across the economy, viable UK businesses retain significant strengths and potential.

“Timely access to experienced turnaround support can protect jobs, preserve valuable capabilities and help organisations adapt for the future.”