BusinessBusiness RecoveryInsolvencies rise as downturn bites

Insolvencies rise as downturn bites

Insolvencies in 2002 have risen more than 10%, the Department of Trade and Trade and Industry has revealed, illustrating the extent of the current economic downturn in the UK.

Link: E&Y names and shames ‘failures’

The DTI’s insolvency statistics show a total of 12,240 personal and corporate insolvencies in the fourth quarter of 2002 compared to 11,104 at the same time last year.

Company insolvencies rose the most on a year-on-year basis. In the fourth quarter of 2002, 4,323 companies went to the wall in England and Wales, rising almost 15% from the same period in 2001. Corporate insolvencies rose 11.1% compared to the third quarter, which had seen some recovery after the sharp jump the second quarter.

The fourth quarter saw 7,917 individuals go insolvent. This is a 7.8% rise compared to last year’s figure of 7,342. But unlike in the corporate world, individual insolvency rates rose steadily.

According to PricewaterhouseCoopers, mid-market companies have been particularly hit by the rise in company insolvencies as a raft of major corporate restructurings and profits warnings squeezed suppliers and trade partners.

In contrast the number of companies entering receivership fell by 21% in the fourth quarter 2002 compared to the same period a year ago. This reflects the established rescue culture among the UK clearing banks which increasingly favour rescue and rehabilitation of larger companies rather than formal insolvency.

Related Articles

Carillion CFO blew whistle over 'sloppy accounting' months before collapse

Business Recovery Carillion CFO blew whistle over 'sloppy accounting' months before collapse

3m Alia Shoaib, Reporter
Toys R Us UK and Maplin enter into administration after failing to secure buyers

Business Recovery Toys R Us UK and Maplin enter into administration after failing to secure buyers

3m Alia Shoaib, Reporter
How to avoid a Carillion collapse

Business Recovery How to avoid a Carillion collapse

4m Russell-Cooke
Carillion collapse: The week so far and industry reaction

Business Recovery Carillion collapse: The week so far and industry reaction

4m Emma Smith, Managing Editor
Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

Business Recovery Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

4m Emma Smith, Managing Editor
Carillion: PwC appointed as special managers – what happens now?

Business Recovery Carillion: PwC appointed as special managers – what happens now?

4m Emma Smith, Managing Editor
Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

6m Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

6m Emma Smith, Managing Editor