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Insolvency picture is mixed say Portland
Published on: 10 November 2003
The picture reflected in the latest insolvency figures from the DTI is a mixed one, say Portland Business & Financial Solutions, the south's largest business rescue and insolvency specialists.
According to new DTI figures business insolvencies fell in England and Wales in the last quarter with 3398 businesses failing, down 11.2% compared with the previous quarter and a drop of 12.5% on the same period a year ago.
Individual insolvencies, the current focus of much attention, show a very different picture with 9094 bankruptcies, showing an increase of 4.1% over the previous quarter and up 16.9% over the same period last year, continuing the strong upward trend since consumer debt levels started to balloon.
Portland said the recent quarter point increase in bank rate, among the first to be sanctioned by a major world economy, and any future rate rises will boost insolvency figures as companies which did not correct a poor debt position during the recent period of low interest rates, come under increased financial pressure.
Carl Faulds, managing director of Portland, which is based at Whiteley, commented: As the economy starts to recover the insolvency figures stand to remind us there are still struggling businesses, which may get left behind as interest rates rise, and recovery is only patchy. The decision by the European Central Bank to leave the key refinancing rate unchanged at 2.0% shows that it is still waiting for an expected economic recovery to begin.
The annual rate of insolvencies as a percentage of active companies registered is now 1.0%, compared with highs of around 2.5% in 1992 and 1993.
10 November 2003
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