English business insolvency trend
We reported just over a year ago (here) on Euler Hermes' 2006-2007 Insolvency Outlook, which suggested a 3% increase in business insolvencies in 2007.
Their latest report, issued in November 2007, forecasts under the headline
"United Kingdom - A rise in insolvencies in sight"
an 8% increase in insolvencies in 2008. Interestingly, it relates that increase to GDP growth of 2%.
Three months on, forecasts are for rather lower GDP growth. The Bank of England Inflation Report published on 13 February suggests (here) a decline to well below 2% GDP growth during 2008, particularly when the Governor's introductory remark is taken into account:
"the potential for further falls in asset prices and tightening of credit conditions means that the balance of risks around the central projection is on the downside, particularly over the next eighteen months."
Euler Hermes' previous report (linked here) noted the strong negative correlation between insolvency and GDP growth, and the elasticity - a 1% fall in GDP growth gives a 10% rise in insolvencies.
With the lower GDP growth now forecast by the Bank of England, the prospects are for a somewhat larger increase in insolvencies than Euler Hermes' November forecast of 8%.
PS Does anyone know why there was an anomaly in the q4 2006 administration statistic? From the Insolvency Service figures there appear to be perhaps 700 extra appointments that quarter, mainly in London.
If Nick Wood at Grant Thornton wasn't entirley to blame he certainly was a heavy contributor with the Personal Service Companies that he was appointed to on 25th October.
Although I did not list all these due to their volume I now have details of all Administrative Receiverships and Administrations since March 2006.
Geoff
Many thanks. I'm sure Nick Wood was entirely to blame - 884 adminstrations on one day (part of an asset tracing exercise and fraud enquiry to recover liabilities to HMRC) was certainly enough to cause an unnatural spike in the numbers.
Is proof of debt compulsory for all creditors, in a company winding-up proceedings. What are the consequences if a creditor does not submit a proof of debt. Are there any decided cases under English insolvency Laws
Put simply, if a creditor wishes to participate in the insolvency proceedings he will need to prove his claim.
Creditors may elect not to participate but would not then, for example, receive any share of the assets that might become available.