Phil MeekinView Profile
Quarterly insolvency stats released by the Insolvency Service for Q4 reflect the bigger picture of signs of general economic recovery in the UK.
Quarterly insolvency stats are the latest statistics released by the Insolvency Service for Q4 (and the whole of 2013) reflect the bigger picture of signs of general economic recovery in England and Wales.
The positive pointers we have recently seen falling inflation and unemployment rates alongside a revival of activity in the property market. It backs up the optimism about growth in the nation’s total output – GDP. All of this was revealed and underscored by the insolvency statistics.
The headline results for companies saw:
- An overall decrease of 7.3% in company liquidations in 2013 compared with 2012 and the lowest level since 2007. Of the total 14,982, compulsory liquidations accounted for 3,624 (down 14.9% on 2012 and the lowest level since 1981), and 11,358 were creditors’ voluntary liquidations (down 4.5% on 2012 and the lowest level since 2010).
- The number of administrations, receiverships and company voluntary arrangements were all lower in 2013 than in 2012.
Pointers like these suggest the economy is on the mend. Although, the National Institute of Economic and Social Research (NIESR) suggest that the UK’s recovery is fragile. It recently warned that ‘abysmal’ productivity levels meant the recent recovery was far from assured. Further stating that in real terms consumer wages were still at 2004 levels. It says, they will not rise above their 2009 peak until ‘around 2019 or 2020’. Continued growth depends in part on consumer spending and follows low wage growth. Low wage growth can be a threat to continued economic growth. With growth in real earnings will come the return of consumer confidence. This is also an essential ingredient in revitalising the economy.
Looking to individual insolvency statistics, in 2013, there was a decrease of 7.9% on 2012. The lowest level since 2005. Creditor petitions, debtor petitions and debt relief orders all decreased (by 18.8%, 23.9% and 11.7% respectively). The number of individual voluntary arrangements (IVAs), however, increased by 4.9% compared with 2012, standing at 48,967 in total. It is difficult to know the reason for this other than perhaps a growing awareness by the public of alternative ways of addressing financial problems other than bankruptcy.