economy still fragile as corporate insolvencies rise
6 May 2011
The Insolvency Service today released statistics for
insolvencies in the first quarter of 2011.
There were 4,121 companies that entered into insolvent
liquidation, which was an increase of 3.7% on the previous
quarter.
Dominic Offord, insolvency expert at law firm Browne Jacobson,
commented:
“These figures demonstrate the continued fragility of the UK
economy. The retail sector, with some notable exceptions, continues
to struggle as individuals reign in their purse strings. Whilst
banks are generally supportive of existing business customer’s
borrowings, new credit lines remain difficult to come by. Those
businesses reliant on the public sector are now feeling the impact
of public sector cuts and other recent statistics show the
manufacturing domestic sector also appears to be running out of
steam with lower orders and higher output prices.”
There were 30,162 individual insolvencies in the first quarter
of 2011, a decrease of 15.5% on the same period a year ago.
Offord added: “This reduction is likely to be attributed to
individuals controlling their spending. Should interest rates
increase later in the year we could see both the corporate
insolvency figures rise steeply.”