Business failures show slight increase

Figures from research firm Equifax show in October and November there was a 3.2 per cent increase on the same two months a year earlier, when 517 businesses failed, compared with 501 in 2009.

Nationally, there was a 4.6 per cent drop in failures compared with the same two months in 2009. Yorkshire and Wales were the only two regions to see increases in insolvencies.

The new figures are a sharp contrast with the third quarter, between July and September, when Yorkshire saw business failures plummet almost 21 per cent year-on-year to 644, compared with 812 a year earlier.

"Whilst the 4.6 per cent drop in year on year failures for October/November is compared with a period when the UK economy was still in quite a bit of turmoil, these figures should be encouraging to businesses and the Government," said Neil Munroe, external affairs director at Equifax.

"However, given that last week's unemployment figures showed no increase in private sector recruitment, it could well be that survival has been at the cost of growth. We believe companies may have also maintained pay freezes to ensure they can weather the current difficult conditions.

"Indeed, reinforcing this line of thought, in a recent 'confidence' survey we conducted amongst consumers accessing their credit file, nearly half said they have felt less financially secure in 2010 with 34.2 per cent putting this down to job uncertainty. There is quite a lot of focus on the private sector to fill the employment gap anticipated in the public sector. But our latest figures do seem to suggest that new jobs are currently being delayed for the sake of survival."