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The sudden collapse of U.S. car parts supplier First Brands has triggered concerns across the financial system. The company, which had 26,000 employees, appeared to have sufficient cash recently. First Brands borrowed from the private credit market against their outstanding debtor book. The private credit market is less strictly regulated than bank lending and less transparent. When the company filed for bankruptcy in September, they owed between $10 billion and $50 billion, compared to assets of $1 billion to $10 billion.
The failure of U.S. company Tricolor, who specialise in lending to low-income car buyers, has raised similar concerns. In 2007, the collapse of subprime mortgage lenders in the U.S. led to the collapse of Leman Brothers and a financial recession. There are concerns on Wall Street that these failures could be the first sign of a wider crisis.
Fashion accessories retailer Claire’s Accessories has called in administrators, putting 2,150 jobs at risk in 278 U.K. stores and 28 in Ireland. They will continue to trade while they decide on the company’s future, including exploring a possible sale. This follows Claire’s Accessories in the U.S. and Canada filing for bankruptcy. As footfall in high street retailers has fallen, they have faced strong competition from online fast-fashion companies such as Shein and Temu. In the U.K., Claire’s Accessories made losses of £25 million over the last three years.
UK Export Finance (UKEF), a U.K. government department and export credit agency, announced a loan guarantee of £1.5 billion to support Jaguar Land Rover's (JLR) supply chain following a recent cyber attack. JLR employs 34,000 people and their suppliers employ around 120,000 people, many in SMEs. Some suppliers only supply JLR, while others also sell to other car makers.
In a recent publication Tokio Marine HCC reported that, following a fall in 2024, U.K. business failures have since remained at a relatively high level for the first half of 2025. The outlook for the second half of the year and for 2026 is troubled due to tight lending conditions, subdued demand and pressure on profit margins. Inflation has also crept up, making interest rate cuts less likely.
On a positive note, the prospect of a global trade war has decreased, as many countries have signed trade deals with the U.S. and the U.K., and the EU has also agreed to reduce some trade barriers. As a result, the International Monetary Fund has made a modest increase in their prediction for U.K. GDP from 1.1% to 1.2%.
DC London Pie Ltd, which ran Pizza Hut restaurants in the U.K., went into administration. This closed 68 restaurants and lost about 1,200 jobs. The remaining 64 restaurants have been transferred to Pizza Hut’s parent company Yum Brands, saving around 1,227 jobs.
Administrators were called into SOS Wholesale, who owed £10.5 million, including £6.4 million to trade suppliers. The 2024 accounts show they remained profitable, although sales, profits and cash were reduced. A report from administrators Interpath stated that the departure of key personnel prior to the appointment of the administrators, combined with the lack of available funding, meant it was not feasible to achieve a rescue of the company.
There were 6,129 insolvencies in England and Wales in the third quarter of 2025. This was a decrease of 3.2% compared to the previous quarter and a decrease of 0.2% compared to the same period last year.
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