Retail insolvencies have climbed by almost a fifth over the past year, as higher interest rates hit Britain’s debt-laden stores.

Almost 2,200 retailers collapsed in the year to the end of January, according to new figures from accountancy firm Mazars.

This was up from 1,843 a year earlier and represents a 19pc increase year on year. Mazars said higher interest rates were causing “significant problems” for retailers burdened by high levels of debt.

It follows years when companies loaded up on cheaper debt before interest rates began to rise. The Bank of England has held rates at 5.25pc since last August, making the cost of refinancing debt much more expensive.

Rebecca Dacre, a partner at Mazars, said: “We are unlikely to see the retail sector trading comfortably until interest rates start to fall.”

It has added to pressure on retailers at a time when shoppers have cut back on spending and inflation has driven up labour costs.

The national living wage is increasing to £11.44 per hour for people aged over 23 this month, the biggest cash rise since it was introduced in 1998.

Most retailers are also being hit by a rise in business rates as of this month. 

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