More companies are going bust

The slow pace of economic recovery saw an increase in the number of businesses falling victim to insolvency during the first three months of the year, official statistics show. The number of companies liquidated during the first quarter of 2011 rose by 3.7 per cent to 4,121, compared with the final three months of 2010, the Insolvency Service said yesterday.

There was better news for households, with personal insolvencies falling 1.7 per cent to 30,162, but business advisers warned that the weak return to growth since the end of the recession meant many companies were continuing to struggle to keep their heads above water.

There is also some evidence of a North-South divide on the economy – and further signs that small businesses are particularly vulnerable to failure.

Kevin Booth, the head of UK business support at Barclays Corporate, said: "A two-track corporate insolvency pattern persists in the UK, with smaller businesses, particularly those outside of the South-east, still at greater risk of failure than mid to large-sized companies. With the economic situation still uncertain, there is some risk that may result in afurther uptick in insolvency numbers towards the end of the year."