Liquidations soar as recession takes toll

The number of firms going bust rocketed in the final three months of last year as recession deepened and banks cut back lending.

There were 4607 company liquidations in England and Wales in the fourth quarter of 2008 - up 11.9 per cent on the third quarter and 51.6 per cent on the fourth quarter of 2007.

Some 29,444 individuals went bust in the final quarter of last year - up 8.2 per cent on the third quarter and 18.5 per cent on the same period a year before.

The situation looks set to get worse this year with stores such as Woolworths and Zavvi already in administration.

The High Street in particular is feeling the pain as consumers rein in spending, although the recession is hitting firms across the economy, from carmakers and builders to restaurants and hotels.

The Bank of England cut interest rates from 1.5 per cent to 1 per cent yesterday but businesses warned that it was no longer the price of credit that was the problem, but rather its lack of availability.