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The number of company closures fell by three per cent in 2007 despite the economic slowdown, according to figures from the Ministry of Justice.

Around 11,800 companies went out of business in England and Wales in 2007 but Ric Traynor, executive chairman at insolvency firm Begbies Traynor, says that the numbers don’t tell the whole story.

‘What the numbers don’t show, if you only look at the annual insolvency reports, is that there was actually an increase in the number of company closures in the final quarter of 2007,’ says Traynor.

‘Essentially what we can see is the culmination of an economic boom that reached its peak in 2007 and then began to slow. Corporate failures were at their lowest for 20 years and the economy was experiencing a period of prosperity that was reminiscent of the situation in the late 1980s,’ he adds.

The company expects a continued rise in the number of businesses winding up, with statistics suggesting that there is likely to be an increase of around of ten to 20 per cent more insolvencies during 2008.

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