Insolvency levels stay low
Aug 01 2007
The number of UK businesses falling into administration has fallen yet further as low insolvency figures continue.
Figures from business advisory firm Deloitte show that 1,205 UK companies slipped into administration in the first six months of this year, a fall of 15 per cent on the same period last year, when 1,419 firms went into the red.
Industry experts, however, are warning that those figures should be treated with caution and that the trend could be set to reverse. That comes amid growing fears that more business failures may be likely as the effects of the recent string of interest rate rises announced by the Bank of England begin to bite.
'We should not be misled by the current figures, as at Deloitte we are seeing more work dealing with troubled companies, which were acquired from earlier failed enterprises and which are now beginning to fail again with increasing momentum,' comments Lee Manning, reorganisation services provider at Deloitte.
'Also, the banks are getting more nervous about lending money with interest rate rises beginning to bite, we have seen a marked increase in the rate of business reviews we are being asked to undertake.'
Firms in East Anglia showed the biggest decreases in numbers of businesses becoming insolvent, while the north-east also performed well. More firms in Scotland and Wales, however, were found to be suffering, with five and ten per cent respective increases in the number of companies going into administration in those regions.
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