Insolvency rates hit five-year high.
Company start-ups that fail helped drive up the number of companies going into liquidation by 8% to their highest level in five years, according to new government figures. Some 14,283 businesses went into liquidation in England and Wales last year, the highest rate since 1995. The DTI said last week there were 3,450 company insolvencies in the fourth quarter of 1999, up 1.6% on the same period last year while personal insolvencies rocketed by over 11%. According to PricewaterhouseCoopers, the increase represents an increase in company start-ups, sustained growth in the UK economy and an increased reluctance on behalf of creditor banks to instigate formal receiverships. A spokesman from the firm’s business recovery services division said: ‘The paradox of the strengthening economy is that as more would-be entrepreneurs pursue their dreams of riches, the number of failures will inevitably rise.’ The DTI said 1.2% of active companies became insolvent in the 12 months ended Q4 1999, the same as in the corresponding quarter in 1998. It added that there were 7,351 individual insolvencies in England and Wales in the fourth quarter of 1999 on a seasonally adjusted basis, an increase of 11.5% on the same period a year ago.