Business Failures Leap as Credit Crunch Hits Companies

The credit crunch finally appears to be having an impact on UK businesses, with corporate failures in the UK increasing for the first time in over 12 months. According to industry figures released today by Experian, the global information services company, business failures in the UK increased by 8.5 per cent in Q1 2008, the first increase recorded since Q4 2006.

In the first quarter of 2008, 4,798 businesses failed, 374 more failures than in the first quarter of 2007 and an increase of 124 on the final quarter of 2007. The downturn also appears to be gathering pace across more industry sectors, with an increase in the number of sectors Experian monitors experiencing more failures compared to the last quarter of 2007.

The number of businesses failing in Q1 2008, 4,798, is the highest since Q4 2006 and the second highest reported in a single quarter since Experian began recording the figures in 1997.