The total was comprised of 68 creditors’ voluntary liquidations (CVLs), 43 compulsory liquidations, four administrations, and one company voluntary arrangement (CVA).

The overall insolvency rate for the 12 months leading to July 2025 also improved, falling to 51.4 per 10,000 active companies, a drop of 2.4 from the preceding year.

Despite this positive data, experts have warned that underlying economic conditions remain challenging. Michelle Elliot, a restructuring partner at FRP in Glasgow, described the second consecutive monthly fall as “positive news” but cautioned that for many businesses, “conditions aren’t too rosy”. She pointed to stubbornly high inflation, which is weakening consumer demand and constricting cashflow for businesses.

Ms Elliot suggested that while the recent interest rate cut in August might offer some relief, it would not be a quick fix for thin order books or the damage from months of economic stagnation. “We can expect insolvency levels to remain elevated for the foreseeable future,” she added.

This cautious outlook reflects the broader UK picture, where total insolvencies rose slightly in July. Nick O’Reilly, restructuring director at MHA, highlighted the immense pressure on the retail and hospitality sectors. He cited rising staff costs, driven by increased employer National Insurance contributions and a higher national minimum wage, alongside a significant reduction in the business rates discount.

However, Mr O’Reilly argued that for many struggling companies, these costs were “the straw that broke the camel’s back” rather than the sole cause of failure. He noted that businesses like Claire’s Accessories, which recently appointed administrators, had been under financial pressure for years, also contending with falling sales and competition from online rivals.

He concluded that overall business confidence in the UK is lower than it should be. Using the construction sector as an example, Mr O’Reilly observed that while confidence is low, this has not yet translated into the high number of insolvencies that might be expected, suggesting some business owners may have “convinced themselves that the situation is more dire than it is”.