Record number of UK businesses bankrupted in 2006

The number of British businesses going bust jumped by nearly 11% in 2006, new figures show.

Information group Experian says that corporate failures hit 20,067 this year - 1,938 more than in 2005 and the highest number since records began in 1997.

The figures come just days after it was revealed that a record £1.4bn (€2bn) of bad debt was written off by creditors in 2006 as more than 100,000 people became insolvent.

Professional services firm KPMG estimates that this year saw around 110,000 people become insolvent - the first year the total has broken the 100,000 barrier.

The rise in corporate failures was the second in a row after falls in 2003 and 2004.

Jo Howard, marketing director for Experian's business information division, said: "Business failures fell in 2003 and 2004, then rose again in 2005 - also by 10.7% - but it looked as though there were signs of improvement in the third quarter of 2006 when business failures fell by 4.1%.

"Despite this, our predictions for an overall increase in corporate failures have sadly rung true.

"The high rise in corporate failures during quarter four of 29.1% was the highest quarterly increase recorded since we started reporting them and has pushed 2006 into the red with an overall increase of 10.7% for the year as a whole."

Experian said that only receiverships declined in 2006, with administration orders, voluntary liquidations, compulsory liquidations and voluntary arrangements all increasing.

It also gave a regional breakdown, which showed that the North East of England, the City of London, and the North were the only areas to see a decrease in business failures.