Insolvencies of private companies in the U.K. are slightly lower, but the level of financial distress being felt by businesses in the country has highlighted the uncertain outlook for the economic recovery, according to Financial Times. On Friday, Insolvency Services reported that the total number of corporate insolvencies dropped by 0.6% in the fourth quarter of 2010 from the previous three months, and the 4,988 insolvencies that were declared represented a level 14.5% below the number of insolvencies seen one year earlier.
Despite the improvement in corporate insolvencies, the survey found 642 companies entered administration, which represents an increase in the number of big businesses starting the insolvency process than the 633 cases opened in the previous quarter. Mike Jervis of PricewaterhouseCoopers said, “This is not a welcome trend and highlights the ongoing certainty in the economy.” Economists are also worried that looming austerity measures could pose a threat to the private sector economy.
