Number of firms going bust has soared

Recently released figures have shown that as the recession in the UK continues to take a hold, an increasing number of firms and businesses have been going bust. Figures from the Insolvency Service have shown that liquidations rocketed in the last quarter of last year, as the recession got worse and banks continued to restrict lending, making things very difficult for many smaller businesses.

The last quarter of 2008 saw over 4600 liquidations across England and Wales, which was the highest figure since the Insolvency Service started keeping records in 1998. This reflected a rise of over 11 percent compared to the third quarter of last year and also reflected an increase of over 50 percent compared to the fourth quarter of the previous year.

One industry group predicted that the situation would continue to get worse even though many companies were trying to restructure so that they could survive the recession. One official from the group said: ‘A number of companies and their stakeholders are trying hard to restructure their businesses, but given the speed of the downturn, it is inevitable that some will run out of cash.’

It has been predicted that over the course of this year at least five thousand firms and businesses will go into liquidation across England and Wales, which means that the number of companies going bust could effectively double in the next two years.