Press Releases
05 May 2009
Leap in corporate insolvencies as recession takes its toll
The latest figures published by The Insolvency Service today reveal that the number of corporate insolvencies in England and Wales has risen by 56% in the past year to reach 4,941 in the first quarter of 2009. Wilkins Kennedy says that there are likely to be many more corporate insolvencies as the recession continues to take its toll on businesses.
There were 29,774 individual insolvencies in the last quarter, a 1.6% increase on the previous quarter and an increase of 19% on the same period a year ago.
Comments from Anthony Cork, Director,
Top 25 accountants Wilkins Kennedy Tel: 020 7403 1877
“The freezing of lending to businesses is thawing too slowly to help many businesses, and this is hitting small businesses hardest.”
“Even small businesses with strong business plans are having to provide a high level of security against their loans, and many company directors are struggling to borrow against assets which have plunged in value.”
“In addition small businesses are also being confronted by higher borrowing margins as lenders raise their interest rates.”
“Meanwhile weaker businesses who have kept themselves afloat by taking on high levels of debt even before the credit crunch took hold are finding that their lenders are no longer prepared to fund them at realistic interest rates.”
Hospitality industry joins construction and manufacturing in the firing line
“Whilst construction and manufacturing businesses have been some of the most high profile victims of the credit crunch the hospitality industry is also now coming under pressure as it struggles against a fall in consumer sentiment.”
“We can expect more and more businesses that rely on discretionary consumer spending to fail as unemployment continues to rise and consumers tighten their belts even further.”
Rising unemployment to push more and more people over the edge
“Rising unemployment can only add to the rising number of personal insolvencies as those with outstanding debts and mortgages struggle to make repayments.”
“Whilst the impact of the economic crisis has already forced a large number of individuals into bankruptcy already many of those included in today’s figures are likely to be those who were already struggling with high credit card debts before the credit crunch took hold, rather than those who have recently lost their jobs.”
“There are many more people on the brink of bankruptcy, with the number of personal insolvencies likely to continue rising even after the economy has begun to recover.”
ENDS
Press enquiries:
Anthony Cork
Wilkins Kennedy
Tel: 020 7403 1877
Jane Lougher or Nick Mattison
Mattison Public Relations
Tel: 020 7645 3636
