More than half a million UK companies are in “significant” financial distress, and more than 40,000 in “critical” distress, according to insolvency experts Begbies Traynor’s latest “red flags” report. The report found that 554,554 companies were in distress, up more than 30% from last year, and up a little from the fourth quarter of last year. The number of firms in “critical” distress was slightly lower than at the end of last year, but still very high by historical measures at 40,174. High interest rates have been a challenge for businesses, as borrowing becomes more challenging, while customer sentiment remains weak. Businesses in some sectors have also had difficulty recruiting. London has the most at-risk firms of any region in the country, with 12,089 in critical distress and 157,156 in significant distress. Julie Palmer, Partner at Begbies Traynor, said: "Despite some optimism as we entered the new year, 2024 has so far been characterised by a continuation of the same pressures that plagued companies in the UK throughout 2023. "Since the pandemic, hundreds of thousands of UK businesses depleted their financial reserves and loaded their balance sheets with increasingly unaffordable debt which for many may simply be too great to...