experts warn insolvencies are set to soar

Number of personal insolvencies fell in the last three months of last year but experts say that numbers are set to soar. 

The number of people becoming insolvent fell by 3.9 per cent in the last three months of last year, a decrease of 16.4 per cent year on year.

The number of corporate insolvencies rose 0.3 per cent compared to the previous quarter, but fell 2.1 per cent year on year. The total number of liquidations throughout last year fell by 5.4 per cent to 12,426.

The number of compulsory liquidations fell by 7.2 per cent in the last quarter, and 17 per cent year on year, while the number of voluntary liquidations fell rose by 5.4 per cent in the quarter and 9.5 per cent year on year.

But experts said that the dip in corporate insolvencies was likely to be short-lived. Malcolm Shierson, a partner at Grant Thornton, the accountant, said: “We now expect the number of corporate insolvencies to increase by 10-15 per cent in 2008, as many of the credit arrangements offering life support to ailing companies have almost disappeared. It is increasingly unlikely that there will be a quick return to business as usual.”

A survey released yesterday by Ernst & Young, the revealed the growing pressure on UK businesses. The report showed that profit warnings from UK quoted companies rose dramatically in Q4 2007 to reach the highest quarterly and yearly levels since 2001, with almost one in five who warned blaming the impact of the credit crunch.

insolvencies down in england and wales

The number of people declared insolvent in England and Wales fell marginally in 2007, said the Insolvency Service. The number of individual insolvencies dropped by 0.6% last year to 106,645, compared to a record high in 2006.

Bankruptcy orders were 2.4% higher than 2006 at 64,480, but Individual Voluntary Arrangements were down 4.9% to 42,165 last year compared to 2006.

The number of insolvencies in the final quarter of the year fell dramatically compared to the same period in 2006.