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Business failures "jump 20%"

Business failures across the UK rose by 20.3 per cent year-on-year in the third quarter of 2011.

According to research by business information provider Equifax, a total of 7,994 companies went under between July and September, the highest figure for more than 12 months and not far short of the peak seen in the second quarter of 2009, when 8,874 firms went bust.

In percentage terms, Wales saw the biggest annual increase in failures with a 37.1 per cent rise between Q3 2010 and Q3 2011 to 240 cases.

Other areas that saw a year-on-year spike in companies going bust included Scotland (up 34.1 per cent to 228), London (up 30.4 per cent to 1,729) and the South East (up 27 per cent to 1,595).

Only one region, the East Midlands, recorded an annual decline in business failures, with the number of collapses dropping by 4.5 per cent to 428.

Sector-wise, retail had by far the biggest percentage increase in company failures, with the figure rising 41.8 per cent to 658 cases. However, in terms of overall numbers, the services sector was worst hit, recording 2,001 company failures in the third quarter.

There was better news for the transport and communications sector, which saw business failures edge down by 2.8 per cent year-on-year.

Mark Nuttall, director of Equifax Commercial & SME, said, "This report continues the disappointing trend we saw start in the summer.

"The reality is that businesses are continuing to find it much harder to keep their heads above water as the economy fails to pick up. The failures in the retail sector in particular reflect the lack of consumer confidence being reported from the high street."

By Andy Jowett

Business failures "jump 20%"
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