Personal and company insolvencies rocket
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6 February 2009

LONDON (Reuters) - The seasonally adjusted quarterly data for companies show the highest number of insolvencies since that particular series began in 1998. On an unadjusted basis, the 4,525 companies that went bust in the fourth quarter of 2008 is the highest number since the first quarter of 1994.

Meanwhile the housing market is likely to face further pressure as banks repossess debtors' homes.

"While the substantial cuts in interest rates by the Bank of England will obviously help some people, they are likely to be insufficient to save many from insolvency," said Howard Archer, chief UK economist at IHS Global Insight.

"The more that house prices fall, the more people will be trapped with negative equity. And it is those people with the weakest credit ratings that are being hardest hit by tighter lending conditions and more punitive terms."