Corporate failures set to rise further
THE number of businesses going into liquidation has continued to rise over the past three months, official figures revealed have revealed.
And although the number of individuals being declared insolvent in England and Wales fell during the third quarter of 2011, experts warned that millions more are “teetering on the brink financially”.
A total of 4,242 companies went into liquidation in the three months to September 30, the Insolvency Service said, 0.1% up on the second quarter and 6.5% higher than in the same period last year.
The corporate insolvency total was the highest since the final three months of 2009, when the figure reached were 4,494.
The number of firms entering into administration fell from 695 in the second quarter to 673, although this was still a 6.3% rise on the same period last year.
Nigel Millar, a partner at Baker Tilly Restructuring and Recovery in East Anglia, said: “After a week of further turmoil and continued uncertainty in the eurozone and wider global markets, it is perhaps some welcome news that UK company administrations, on the whole, have remained stable within the UK.
“However, with huge market uncertainty and with inflation rates rising again, there is a very real risk that this stability could start to reverse in Q4.”
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Personal insolvencies fell to 30,219 in the three months to the end of September, down from 30,513 in the previous quarter and 11% lower compared with the same period a year ago.
But the Consumer Credit Counselling Service, a debt charity, said more than six million households were still “financially vulnerable”, and warned that there could be a further surge in insolvencies over the next year.
“There are millions of people teetering on the brink financially, whose household budgets are getting harder to manage every month,” said Delroy Corinaldi of the CCCS.