Business failure rates ‘likely to rise again’

Posted 21/09/2009

More UK workers could find themselves being forced into redundancy as a result of increasing numbers of business failures, new claims have suggested.

According to insolvency specialist R3, the next couple of months could see a rising number of businesses starting to struggle, despite recent figures revealing that failures decreased in August.

President of the organisation Peter Sargent attributed this to “a degree of seasonality”, explaining: “If things follow the pattern of previous recessions the number of business failures is still likely to increase for perhaps six [or] maybe even 12 months, even if the economy starts to recover.”

However, he noted that this recession has been different from others to an extent, owing to increased support given to failing businesses by banks.

This comes after figures released by Experian showed that the UK business failure rate fell to its lowest level last month since September 2008.