Company insolvencies on the rise

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COMPANY insolvencies in England and Wales rose by an annual 4.3 per cent in the first three months of 2012 to their highest level since late 2009, official data showed, raising doubts about the health of the economy.

The Insolvency Service, a government body, said that 4,303 businesses went into liquidation in the first quarter of 2012.

This was the highest seasonally adjusted total since the last quarter of 2009, when Britain had just emerged from a deep recession.

Official data last month showed that Britain had entered a shallow recession, though more upbeat business surveys mean that the Bank of England and private-sector economists take a more positive view.

There was better news for individuals, with the number of personal insolvencies 4.7 per cent lower than a year earlier at 28,723 in the first three months of 2012, the lowest total since the last three months of 2008.

These figures are not available on a seasonally adjusted basis.

Regional figures, showing insolvency rates in Yorkshire, are expected next week.

Toby Underwood, partner in the business recovery services practice at PwC in Leeds, said: “Insolvency volume increases at these levels highlight how fragile the economy is.

“But we can take comfort from the fact that they have not fallen off a cliff – despite the recess- ion.

“Anecdotal evidence suggests that the small and medium-sized enterprise market is bearing the brunt of this fragility. Some of these businesses have very limited options in the face of reduced demand and other business problems.”