Business insolvency stress remains elevated across 12 sectors

UK business insolvency stress has remained significantly above its historical baseline for 17 consecutive weeks, according to FrictionIndex, the UK’s first weekly measure of corporate insolvency activity across 21 economic sectors. T

The index is currently elevated, with 12 of the main 18 tracked sectors showing above-normal stress levels despite an 8.4% decline over the past four weeks from its recent peak.

While the headline UK index is falling, seven sectors remain in critical territory, the most severe stress classification in the index. Manufacturing leads at 149.4, nearly 50% above its historical baseline, followed by Agriculture at 149.1, Construction at 137.3, and Financial Services at 132.1.

Among economically significant sectors, Agriculture surged 14.7% in a single week while Human Health and Social Work rose 14.1%.

Nick Neo, Founder of Friction Index, said “Seventeen consecutive weeks above baseline with seven sectors in Critical territory tells a very different story to the official narrative of economic normalisation”

“The credit tightening cycle isn’t over — it’s still flowing through the corporate sector, and the sectors most exposed to bank lending are showing it most acutely. The Insolvency Service will publish data for this period in approximately six weeks. By then, conditions will have changed again. That six-week lag, multiplied across 21 sectors with no granularity, is precisely the gap