DTI reveals latest insolvency figures

The number of company insolvencies increased by just under 1% compared to theprevious quarter, and fell by over 6% compared to the similar period last year.Individual insolvencies remained level with 7,655 going out of business – anincrease of just over 6%.

PricewaterhouseCoopers insolvency experts argue that the marginal increase in company liquidations will provide little room for comfort for many companies struggling to remain afloat with consumer spending reaching ‘unsustainable’ levels.

A recent Bank of England financial stability review argued that the leastprofitable companies today are in a worse financial situation than strugglingbusinesses in the recession.

Stephen Taylor, European insolvency leader at PwC, said: ‘There is sufficientevidence to suggest that we are currently under the ‘natural level’ of companyinsolvencies for a healthy and vibrant economy. Any future rise in companyfailures, caused by a fall in consumer spending and high levels of e-businessfailures, is not necessarily ominous for the economy.’

The UK experienced 125 insolvencies for every 10,000 registered companies.In many, PwC report predicted that a large number of e-businesses faced failurebecause of its high cash ‘burn rate’.

Taylor added: ‘The insolvency figures released today do not reflect thedifficulties facing this sector in recent months.’

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