BDO predict business failures to rise in future

CORPORATE INSOLVENCIES will continue to stay above pre-recession levels in the next five years, according to BDO's Industry Watch report.

The research looked at business failures in the next five years with the firm predicting corporate insolvencies will remain above "pre-crisis" levels until at least 2015.

The firm is calling on the Bank of England to keep interest rates low to avoid risking damage to the recovery.

However, business failures are on the decline as 2011 is expected to produce 20,900 down from 22,300 in 2010 and 26,200 in 2009.

Shay Bannon, head of business restructuring at BDO, said: "UK business failures have continued to fall over the course of 2010 and this trend looks set to continue in 2011. This is an encouraging sign, but as growth is likely to be sluggish over the next five years, there could be underlying risks for businesses."

Industry Watch is a quarterly projection of company failures over the next three years using forecasts from the Centre for Economics and Business Research.