Number of companies going bust reaches five-year high

The number of companies going to the wall reached a five-year high in 2000, according to figures yesterday that will add to calls for a cut in interest rates next week. A total of 14,320 firms went bust last year, a fraction up from the 14,280 failures in 1999 but well ahead of the 12,610 in the previous year.

The number of companies going to the wall reached a five-year high in 2000, according to figures yesterday that will add to calls for a cut in interest rates next week. A total of 14,320 firms went bust last year, a fraction up from the 14,280 failures in 1999 but well ahead of the 12,610 in the previous year.

The last time there were as many corporate failures was in 1995 when 14,536 failed. Individual bankruptcies jumped to a six-year high in 2000 as 29,537 people filed for insolvency, compared with 28,806 the previous year. The Department of Trade and Industry, which produced the data, said the last three months of 2000 saw 3,697 companies fail - a 6.7 per cent rise on the same period in 1999, but a 1.2 per cent fall on the previous quarter.

David Allen, head of the commercial dispute resolution group at the City law firm Rowe & Maw, said: "We are seeing an increase in the number of insolvency instructions and the increase is across a broad range." He said his firm had seen a sharp rise in the number of failures in the telecoms, e-commerce, publishing and fashion industries. While the UK was nowhere near a recession, there were strains emerging from setbacks such as Corus and Vauxhall and from uncertainty in the US, he added.

Neville Kahn, business recovery services partner at accountants PwC, said the small- and medium-sized business sector was suffering from intense competition in sectors such as retailing and car component manufacturing. "The rise in insolvencies is clearly not as rapid as at the start of the 1990s but we do expect a continuing rise over the year."