The number of company insolvencies in England and Wales rose by 38 percent last month as Britain faces a cost of living crisis.

Figures from the Insolvency Service showed that 1,948 companies tumbled into insolvency in October, compared with 1,410 over the same month last year.

It also represented a significant increase on the 1,684 insolvencies recorded in September 2022.

Experts said a build-up of debts following the pandemic and weak consumer demand have contributed to the increase in business failures.

"A series of economic issues, the end of temporary insolvency legislation, and a lack of a post-Covid bounce have hit all parts of the economy and the supply chain hard," said Nick Fisher, vice president of insolvency and restructuring trade body R3.

"Worries about the price of food and fuel as winter approaches means many people are saving their money ahead of their bills coming in and simply aren’t spending -– and a range of businesses, including household names, are struggling as a result," he said.

Britain is likely already in recession after its economy shrank in the third quarter and is set to do so again in the final three months of the year, according to the Bank of England.

The BoE, which is raising interest rates to combat sky-high inflation, has warned the UK economy may experience a record-long recession until mid-2024.

It comes after former Prime Minister Liz Truss's unfunded tax-slashing budget sparked a collapse in the pound and an explosion in state borrowing costs during her 49-day tenure.