High energy costs and tightened consumer spending helped push company failures up by 11% in 2005, new figures reveal.
After falling for two years, corporate failures in the UK jumped to 18,122 last year, the highest number recorded since 2002, according to a report from financial data firm Experian.
The company said that 4,501 businesses closed down in the final three months of the year, a 7% rise over the fourth quarter of 2004.
Firms in England's north-east suffered the worst, as the region's insolvency rate rocketed by 59%. The West Midlands finished a distant second with a closure rate of 19%.
"The financial landscape for UK companies had already begun to change by the start of 2005 as rising interest rates and the consumer slowdown all took their toll," said Richard Lloyd, managing director of Experian's business information division.
"And, of course, the rapid rise in energy prices hasn't helped."
Lloyd added that Experian expects the rise in company failures to continue in 2006.
Among major sectors, non-food retail stores saw the largest increases in closures, shutting down at a rate of 40% over 2004 totals. Diversified industrials, media, business services and construction firms failed at rates of 19%, 15%, 12% and 8%, respectively, over the previous year.
Together, these five sectors accounted for over a third of all business failures.
However, some sectors improved. Insolvencies among post & telecommunications firms dropped 13.4%, while leisure and hotels fell 10.7%.
