Insolvencies up 4.3 percent as recession hits companies hard

Company insolvencies have increased by 4.3 percent over the last year, with 4,303 firms biting the dust during the first quarter.

With big names such as high street retailer Game narrowly avoiding full closure – as it was bought last minute by OpCapita –  over the same period the landscape remains tough for many companies operating in the UK.

There were 1,238 compulsory liquidations, up 11.1 percent from the previous year, and 3,065 creditors voluntary liquidations, according to stats by the Insolvency Service.

In addition there were 1,290 other corporate insolvencies in the first quarter of 2012, including 336 receiverships, 779 administrations and 175 company voluntary arrangements – an increase of 1.8 percent from a year ago.

The outlook for consumer spending looks rather bleak as businesses go bust and unemployment looks set to increase over the course of the year, further damaging the economy, according to one think tank.

According to  figures released by the National Institute of Economic and Social Research today, unemployment is set to hit almost nine percent this year, up from 8.4 percent.

This is creating a scenario whereby the overall GDP growth for the year is set to stay relatively flat, though there is stronger growth expected for 2013.

With bankruptcies and unemployment rising, the current outlook is hardly optimistic for channel players, particularly on the back of recent ONS figures which show that the UK is back in recession.

However, at a recent partner event Intel took a ‘glass is half full’ approach to the economic woes, expressing that its partners do even better during the tough times that are facing the UK and Europe at the moment.