Global information solutions and credit-checking company Experian has revealed an increase in the number of failing businesses in the UK in the first three months of 2005.
The rate of business failure accelerated in the first quarter of 2005 to 1.9 per cent, increasing for the second consecutive quarter after a rise of 0.2 per cent in the fourth quarter of 2004.
In total, 4,168 UK companies became insolvent in the first part of this year, compared with 4,092 in Q4 2004.
The rise in insolvencies affected almost half of all the industry sectors in Britain (15 out of 34).
Experian attributes the accelerated failure rate in part to slowing consumer spending, which took its toll on the retail industry - food retailing saw its failure rate increase by 53 per cent.
"In particular, the retail industry has been hit hard by lower consumer confidence and spending," said Phil Cotter, managing director of Experian's Business Information division.
However, Mr Cotter also said that businesses should be more stringent about credit checking to help protect against insolvency.
"In order to safeguard their future, businesses need to be vigilant to the threat of insolvency and should ensure that best practice is followed when it comes credit management," Mr Cotter explained.
"Carrying out regular checks on both new and existing customers can often make a real difference and can ensure that the risks of exposure to business failures and bad debt are significantly reduced."
A business loan could also be a way to help stave off corporate insolvency.Click here to find out more about taking out a business loan.
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