There are fewer corporate pile-ups on the channel highway than at any point in more than a decade and a half, official stats from credit reference agency Graydon UK reveal. Some 31 firms bit the dust during the second quarter of calendar '14 - the joint lowest rate since 1998 - way down on the 89 recorded a year ago or the 61 …
History shows insolvencies tend to spike in the wake of a recession as businesses spread themselves too finely and run out of cash.
Welcome to the definition of what a "recession" is about.
As to whether this one is over or whether there is "recovery" - I still bet on further redlining in the year ahead.
Yippee...let's go for broke
Statistics such as these are only useful as guides and must be tempered with a little common sense in terms of understanding the underlying reasons for decline or upward swing.
Assuming all is rosy or black is likely to bite your bum when you least expect it. We are in a gentle upward swing in business confidence but the changes and challenges driven by new technologies and services carry with them real threat to those that cannot easily adapt or change direction.
Maplin, despite being a profitable business had to be sold to stop it's parent hitting the buffers. Debt remains a real burden and interest rates are likely to rise in the next 12 months.
Fall In Rate Of Insolvencies
Another reason for the drop in insolvencies is that interest rates have been at historic low rates for many years. How much longer? Who knows but one day rates will rise and everyone who has debts will wish they had paid them off.
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