"The Weil European Distress Index shows that financial pressures on European companies had already moved into 'distress territory' before the escalation of tensions involving Iran, leaving firms with far less capacity to absorb another energy-driven shock."
"The index recorded a reading of 2.5 ahead of the current crisis, compared with -7 in February 2022, indicating a marked deterioration in corporate resilience."
"If energy prices remain elevated and confidence continues to weaken, we could see stress build more quickly than in previous cycles."
"The latest crisis has been driven by disruption to global oil and gas supplies, particularly through the Strait of Hormuz, raising concerns about alternative routes also becoming unstable."
UK businesses are entering a global energy crisis in a weaker financial state than during the 2022 Ukraine crisis. The Weil European Distress Index indicates that many European companies were already in distress before the current Middle East tensions escalated. The index recorded a reading of 2.5, showing a decline in corporate resilience. Energy prices have surged due to disruptions in oil and gas supplies, particularly affecting the Strait of Hormuz, leading to increased costs across various sectors. The UK is particularly vulnerable in this context.
Read at Business Matters
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