Insolvency rates ‘will continue to increase’
The number of companies going into insolvency is set to continue increasing well into 2011, according to a report.
Analysis from accountancy group Tenon has suggested that the number of business failures recorded in 2009 could be set to exceed the 2008 figure by as much as 57 per cent.
According to the firm, the economic factors behind these insolvencies, including a scarcity of available funding and an overall decrease in consumer demand, are likely to persist in the coming years.
The research also suggested that those companies which are currently surviving due to factors such as decreased VAT and low interest rates will become imperilled once these conditions change.
Carl Jackson, national head of Tenon Recovery, predicted that the UK is “unlikely to see a significant reduction [in insolvencies] for another three years”.
This echoes the statement recently made by the UK Insolvency Helpline, which forecast an increase in the number of companies looking to take advice on business failure over the coming months.
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