Bankruptcies hold at 11-year high

THE number of people going bankrupt has surged 27% in the past year, according to the latest figures from the Department of Trade and Industry.

It revealed that 10,294 people in England and Wales became insolvent in the first three months of the year - 0.5% lower than the previous three months, which was the highest level in 11 years, and 26.8% higher on a year ago.

The figures, released a day after the Bank of England increased the base rate from 4% to 4.25%, have stoked fears that British borrowers, who now owe nearly £1 trillion, may increasingly struggle to service their debts.

'It is abundantly clear that, with personal credit rising, more people are overstretching themselves,' said Malcolm Bruce, Liberal Democrat DTI spokesman. 'Between April 2003 and April 2004, 38,500 people were served with bankruptcy orders.

'Yesterday's rise in interest rates can only aggravate the situation.'

The figures for the last quarter of 2003, only marginally worse than today's statistics, were the highest since 1993.

The DTI also said the number of companies that became insolvent fell to 3,155, 4.6% fewer than the three months to the end of December and a 14.3% drop on the same quarter of 2003.