An estimated 1.8 million businesses could be at risk of insolvency as a result of pandemic-related disruption, including 336,000 that face a high risk of going bust, research has found.

The winter wave of Covid-19 has resulted in business sentiment taking a fresh battering in January, with only about one in three companies reporting positive trading conditions, according to a study by Opinium, the polling and research agency, and CEBR, an economics consultancy.

Businesses said that profits had fallen by 18 per cent over the past 30 days. They had reported a 20 per cent reduction in December. More than one in five of the 500 respondents said that they would have to delay planned investments as a result of the tightening of Covid restrictions.

Nearly one in three said that there was at least some risk that they would go insolvent as a result of coronavirus-related disruption, including more than one in twenty that said there was a high risk of going to the wall.

Pablo Shah, managing economist at CEBR, said: “The dramatic escalation of the pandemic has plunged thousands of businesses into a highly precarious position. Critical to the long-term economic recovery will be minimising the damage that businesses sustain during the tough weeks ahead.”

Three quarters expected to be able to return to pre-Covid levels of production within a year of restrictions being lifted. However, one in ten foresaw a more protracted recovery.