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Businesses are still in tough" times, despite the drop in insolvencies in June, cautions David Hudson, restructuring advisory partner at FRP.

Hudson says:

The slight fall in insolvencies this month offers a glimmer of relief - especially for hospitality and retail businesses, which are now reaping the benefits of record hot weather. However, we're still in tough territory. Consumer confidence remains stubbornly low, growth is stuttering - with GDP dipping again in May. June's unexpected jump in inflation will only serve to continue eroding profit margins and consumer demand.

This environment is forcing businesses to fight on multiple fronts. Many will likely only be experiencing breathing space after dramatically paring back costs. Until demand shows a more sustained recovery and input costs ease further, there's a risk that this reprieve is just a pause rather than a turning point."