213,000 UK Jobs at Risk as Business Insolvencies Remain Above Pre-Brexit Levels

Business insolvencies in the UK are projected to place approximately 213,000 jobs at risk as company failures remain stubbornly above pre-Brexit levels. Despite a forecasted marginal decline in total failures through 2027, fintechs and lenders must navigate a landscape defined by high interest rates, energy costs, and a widening competitive gap driven by AI adoption.

What was announced

Allianz Trade expects the number of UK insolvencies to finally begin a downward trend after five years of consecutive increases. The firm forecasts 25,600 failures in 2026, representing a 4% decrease from 2025, followed by a further 3% drop to 24,800 in 2027. Despite this improvement, the volume of business collapses remains high, particularly within the construction, real estate, trade, hospitality, and accommodation sectors, which continue to account for a significant share of the total.

The UK’s trajectory contrasts with the global outlook, where insolvencies are expected to rise by 5% in 2026 and 1% in 2027. This global instability puts 2.7 million jobs at risk annually. Europe is particularly vulnerable, accounting for 60% of these roles (1.6 million), with the UK, France, and Germany leading the figures. North America follows with 650,000 jobs at risk, a 13-year high for both regions.

A significant driver of this pressure is the "higher-for-longer" interest rate environment. Allianz Trade notes that 60% of countries will maintain higher policy rates in 2027 than in the preceding 12 to 24 months. Furthermore, the research highlights a "competitive wedge" created by AI adoption. In markets like Belgium and Sweden, where AI adoption reaches 35%, the most digitized sectors are recording the highest insolvency numbers. This pattern is evident in the Information & Communication sector, which has a 70% AI adoption rate and shows insolvency figures exceeding national averages in five of the eight countries surveyed.

"With multiple shocks compounding since the start of the year, much higher-than-expected interest rates are ramping up the pressure on already fragile companies and this will continue: 60% of countries will maintain higher policy rates in 2027 than in the prior 12 to 24 months, inflating funding costs and squeezing margins. In Western Europe, a +100bp rise in bank lending rates would add between EUR 6bn and EUR 10bn in interest expenses, reducing margins particularly in renewables, telecom, and power. Meanwhile, higher-for-longer energy costs will also intensify the pressure on profitability, especially for energy-intensive European industries"

Aylin Somersan Coqui, CEO of Allianz Trade

The companies involved

Allianz Trade is a global leader in trade credit insurance and risk management, providing businesses with the data and financial protection necessary to navigate volatile markets. The company operates as a critical node in the B2B ecosystem, offering insights into insolvency trends and creditworthiness that inform lending and supply chain decisions. Its leadership includes CEO Aylin Somersan Coqui and Maxime Lemerle, who serves as the Lead Analyst for insolvency research.

The firm has increasingly focused on digital transformation and strategic global expansion to maintain its market position. This includes strengthening its presence in key financial hubs, such as the appointment of Scott Munafò as China CEO to lead growth in Shanghai. Allianz Trade’s influence extends through a network of partnerships aimed at integrating risk management directly into financial workflows. By collaborating with fintechs and logistics platforms, the company ensures that real-time credit data is accessible to businesses facing the very economic pressures—such as high energy costs and interest rate fluctuations—identified in its latest research.

What FF News has reported before

FF News has closely followed Allianz Trade’s efforts to modernize trade credit through technology. The company recently entered a strategic partnership with TreviPay to enhance B2B risk management and underwriting solutions. This followed the unveiling of an API-integration enquiry system with BPL, designed to streamline digital credit enquiries.

In addition to infrastructure improvements, the firm has expanded its sectoral reach, notably through a partnership with 4Trans during a period of 350% year-on-year growth for the logistics fintech. FF News also covered the company’s leadership moves, including when Allianz Trade appointed Scott Munafò as China CEO to drive strategic growth in the Asian market.

What this means

The report highlights a sobering reality for the fintech and lending sectors: the "higher-for-longer" interest rate environment is no longer a temporary hurdle but a structural shift. While the UK’s slight decline in insolvencies offers a glimmer of hope, the sheer volume of jobs at risk suggests that credit appetite among traditional lenders may remain suppressed. The most striking takeaway is the role of AI as a catalyst for insolvency in smaller markets. This suggests that the "digital divide" is becoming a life-or-death metric for SMEs. For fintechs, the opportunity lies in providing the liquidity and risk-mitigation tools that help firms bridge this gap before they become another statistic.