The number of companies going to the wall in England and Wales soared in the fourth quarter of 2008 as the economy contracted by its largest amount since 1980, government figures showed Friday.
The Insolvency Service said the number of companies from across the business spectrum going into liquidation in the fourth quarter was 4,607, up 11.9 percent from the previous quarter and 51.6 percent higher than the same period the previous year.
Corporate failures still have a long way to rise to reach the all-time peak of 6,473, reached in the final quarter of 1992 when the British economy was last in recession.
Nevertheless, the government body indicated that things will likely get worse as the number of firms pushed into a form of bankruptcy more than trebled in the last three months of 2008, when the British economy contracted by 1.5 percent, its deepest slump since 1980.
The number of company administrations across England and Wales in the fourth quarter soared to 2,018 from 575 in the same period the year before. Over the year as a whole, the number of company administrations rocketed 92 percent to 4,820.
The administration process is a form of bankruptcy protection. Administrators are appointed to salvage as much of the company as possible for the benefit of its creditors, a process which can involve trying to keep the business as a going concern or breaking it up and selling it off.
With the recession hitting companies hard, the number of individuals going bankrupt has surged too. The number of individual insolvencies jumped 8.2 percent in the fourth quarter and by 18.5 percent over the year to 29,444, which is higher than at any time during the 1990s recession.