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Company insolvencies set to rise

A report by Begbies Traynor has concluded that there are around 127,000 UK companies which are suffering "significant financial distress". This comes at a time when the UK economy is starting to waver and the fragile nature of the ongoing recovery has been laid bare for all to see. It is estimated that these 127,000 companies owe between them around £70 billion which is a 26% increase on the first quarter of 2010.

There is no doubt that company insolvencies, and the personal bankruptcies, will increase significantly over the next 12 months as the economy continues to struggle and more and more people and businesses suffer. Unfortunately this is a very important stage towards economic recovery in the UK and one which the UK government can do relatively little to avoid. There will be significant pain in the short to medium term although hopefully this will lead to significant gain in the longer-term.

As we see the number of corporate bankruptcies continuing to grow this will place major pressure upon the UK economy and the UK employment market. Recently we have seen signs that the UK employment market is starting to soften and indeed permanent and temporary replacement numbers have recently taken a turn for the worse.

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