British convenience store chain McColl's said Friday it had gone bust in the face of weak consumer spending as inflation soars, putting 16,000 jobs at risk.

McColl's, which has about 1,100 stores across the United Kingdom selling food and household products, is entering administration, whereby a troubled company calls on outside help aimed at minimizing job losses.

It added in a statement that the company's main lenders had refused further funding.

Reports said talks on a last-ditch rescue from supermarket giant Morrisons had failed.

McColl's operates about 200 of its stores under the Morrisons Daily brand.

"In order to protect creditors, preserve the future of the business and to protect the interests of employees, the board was regrettably ... left with no choice other than to place the company in administration," McColl's said in the statement.

PricewaterhouseCoopers has been appointed as administrator.

McColl's said it expected PwC "to implement a sale of the business to a third-party purchaser as soon as possible."

The group's share price was suspended on the London Stock Exchange prior to the announcement.

In early trading Friday, its market value had shot up more than 20% on hopes of a rescue deal.

McColl's last month revealed in a trading update that the company was being "impacted by reduced consumer spending and continued supply chain disruption across the industry."

Friday's developments come as Britain faces a cost-of-living crisis, with U.K. annual inflation sitting at 7%, or a 30-year high.

The Bank of England on Thursday warned that British inflation would top 10%, a four-decade high, by the end of the year, fueled by soaring energy prices.

The BoE added that Britain risks falling into recession, as the central bank raised its main interest rate by a quarter-point to 1% – the highest level since the global financial crisis in 2009.

The BoE acted after the Federal Reserve's decision Wednesday to raise U.S. interest rates by half a percentage point as inflation also soars in the world's biggest economy.

Consumer prices are surging worldwide as economies reopen from pandemic lockdowns, and in the wake of the Ukraine war that is aggravating already high energy costs.

Britain's cost-of-living crisis is meanwhile being blamed in part on British Prime Minister Boris Johnson's Conservative party losing control of key London councils in local elections Thursday.