Brexit is going to put hundreds of companies out of business

The UK's insolvency industry thinks that Brexit will increase the number of business failures over the next twelve months, according to a survey conducted by international law firm Pinsent Masons.

Attendees from more than 400 insolvency firms were surveyed at an conference this week, and 62% of those believe that the UK's vote to leave the European Union will lead to a greater number of business failures over the next 12 months.

The poll also revealed that business confidence in the manufacturing and retail sectors has dropped.

When asked which sector would be hit the hardest, 22% of respondents agreed that manufacturing would, and 22% agreed that retail would.

2016 has already been a difficult year for the retail sector. Eighteen companies have gone into administration, affecting more than 23,000 employees. Most notable among those was BHS, the department store which employed over 11,000 people.

And the sector is likely to continue suffering because in times of economic uncertainty, consumers tend to spend a lot less. Goods on the high street also get more expensive because the price of imported goods goes up as the pound gets weaker.

Manufacturing is likely to suffer because the huge drop in the value of the pound pushes up the price of imported parts, although there is some evidence that the weak pound is making UK goods more appealing to purchase in other countries.

Nick Pike, a partner in Pinsent Mason's restructuring team: "Very little is clear about the terms on which the UK will leave the EU, and so businesses are in a period of great uncertainty.

"Insolvency experts are firmly in agreement that until those issues are resolved, businesses are likely to remain cautious about investment decisions," he added.