Distressed UK Firms Pile Up as War Enters Third Month, Report Says

UK companies faced a sharp jump in “critical” financial distress at the start of 2026, underscoring the mounting pressure that rising costs and weak consumer demand are placing on businesses as the war in the Middle East enters its third month.

Cases jumped by more than a third in the first quarter of the year, according to the latest Red Flag Alert by insolvency firm BTG. The increase was led mainly by consumer-facing sectors, with the sharpest rises registered in hotels and accommodation, as well as leisure and cultural activities, according to the report.