Contact: Pamela Shabi
Deloitte
PR manager
+44 20 7303 0587
Latest analysis of insolvency figures from The Insolvency Service has indicated that the number of individual insolvencies has decreased by 8.1% on the previous quarter but increased by 4.2% on the second quarter of 2006. In the second quarter of 2007, there were 26,956 individual insolvencies. This comprised 16,258 bankruptcies, a decrease of 2.9% on the previous quarter and an increase of 7.7% on the same quarter of 2006, and 10,698 IVAs, a decrease of 15.1% on the previous quarter and a decrease of 0.7% on the corresponding quarter of the previous year.
Neville Kahn, reorganisation services partner at Deloitte, commented: “The year on year increase of bankruptcies shows that people are now beginning to feel the impact of the recent interest rate rises and resultant rise in mortgage repayment defaults.”
On the corporate side, corporate insolvencies have decreased by 2.1% on the previous quarter and a decrease of 4.2% on the same period a year ago, there were 3,032 company liquidations in England and Wales in the second quarter of 2007.
Neville commented: “It will take time for the effects of higher interest rates to kick in and impact on companies, but we are now undertaking more business reviews, as banks and lenders are getting more nervous about lending money.”
He added: “Competition from overseas, the increase in the price of raw materials and the recent UK floods, are also likely to have a knock on effect on those companies going forward, particularly in the food industry. In addition, those companies that have been heavily leveraged and enjoyed low interest rates will soon be suffering and will need to evaluate their current debt plans.”
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In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other’s omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press.
