The number of companies going into administration in England and Wales jumped by more than one-fifth in the first three months of the year, while bankruptcies soared by 25%, the latest government figures show.
In all, 858 companies entered administration in the period, according to Insolvency Service figures – the second-highest figure since 1998; 54% higher than the previous quarter; and 22% higher than first three months of 2007, The Times reports.
Experts said the trend would continue. Liz Bingham, Ernst & Young partner and head of restructuring, said the rise in corporate insolvencies was the first sign of a trend which would accelerate in late 2008 and into 2009 ‘as the credit squeeze tightens its grip and constrains demand as well as credit’.
Ken Baird, head of restructuring and insolvency, at the law firm Freshfields, said: ‘The longer the credit crunch goes on, the harder it will be for many to obtain new finance or renegotiate debts.’
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