Liquidations and individual insolvencies soar in UK in Q2

As the UK economy reels from the worst recession since World War II, companies going into administration and individual insolvencies in England and Wales rose to record levels in the second quarter as banks and financial institutions refuse to lend amid the global credit crisis.

The UK government's Insolvency Service showed last week that there was a 39.1-per cent rise in company liquidations to 5,055, while there were 33,073 individual insolvencies in England and Wales in the three months to the end of June.

The company liquidations were an increase of 2.9 per cent on the previous quarter and an increase of 39.1 per cent on the same period a year ago.

This was made up of 1,457 compulsory liquidations, which are down 6.8 per cent on the previous quarter but up 8.7 per cent on the corresponding quarter of the previous year.

There were 3,598 creditors' voluntary liquidations-up 7.4 per cent on the previous quarter and 56.8 per cent on the corresponding quarter of the previous year.

The Insolvency Service data showed that in the 12 months ending Q2 2009, approximately 1 in 120 active companies or 0.8 per cent went into liquidation, which is up slightly on the previous quarter when the figure was approximately 1 in 130.