Business insolvency reaches a new peak due to rising inflation and high interest rates.

Crippling interest rates and soaring prices of everyday items, from a bag of concrete to a cup of coffee, are driving record business insolvencies in Australia, according to research. CreditorWatch’s business risk index highlights the deteriorating outlook for businesses, particularly small companies. In the year to May, insolvencies hit a record high of 1,378, a 38 percent increase in business failures. The electricity, gas, water, and waste services sector saw the highest increase in insolvencies at 89 percent year-on-year, followed by education and training (87 percent) and mining (72 percent). Conversely, the information, media, and telecommunications sector was the only one to report an improvement, with a 2 percent decrease in insolvencies. The survey also found that the food and beverage services sector is the most vulnerable, with a 7.54 percent failure rate, ahead of administrative and support services (5.43 percent) and arts and recreation services (5.40 percent).