The figures reinforce yesterday’s British Chamber of Commerce report that the downturn has taken real hold in the UK economy with little sign of any uplift so far.
The overall increase in business failures for the whole of 2008 compared to 2007 is a staggering 18.2%. Equifax external affairs director, Neil Munroe, believes this shows the real consequences of the downturn in consumer confidence, combined with continued restrictions on lending to consumers and businesses.
“To see the number of businesses going bust for the whole of the year rise so significantly is very worrying,” he said. “But what is equally worrying is the increases in failures in the last quarter of the year. Comparing Quarter 4 2007 with Quarter 4 2008, there is an increase of 32.1% in businesses going into administration. And further evidence is provided of how the downturn has impacted on businesses through the year when we compare Quarter 4 2008 with Quarter 3 2008, with a 24.2% increase in failures.
“These figures reinforce what every economic commentator is saying - that we are not yet at the turning point of the recession, with the numbers of businesses going to the wall highly likely to continue to increase in 2009. It is, therefore, very clear that the efforts from Government, such as the loan guarantee scheme and the initiatives by banks such as fixing fees and releasing more credit, will be absolutely crucial, especially for smaller businesses struggling with cashflow management.”
