The number of small businesses in the UK classed as highly indebted has doubled since the pandemic according to figures from the Bank of England which warned of a likely rise in company collapses by the end of the year.

The figures also showed that 33% of SMEs have debt of more than ten times their cash balances compared with 14% pre-pandemic.

The data was published in a report the Bank of England released alongside its quarterly financial stability update.  Due to escalating levels of debt and higher risk taking in some markets, it advised banks to take ‘a cautious and prudent approach’ to digital assets such as cryptocurrencies.

The Bank said that small and medium sized businesses accounted for two-thirds of the £79bn increase in UK corporate debt between the end of 2019 and the first quarter of 2021, as lockdowns left them fearing for their financial future.