Fewer firms going to the wall

THE number of firms going bust plunged during the first quarter of the year, but the drop in London was half the national average.

In an encouraging sign that the economic downturn has reached a bottom, company insolvencies in England and Wales fell by 13.9% against the previous quarter to 3684 and were 8.2% lower than in the same period last year, the Department of Trade and Industry said.

However, insolvencies in London were down only 7% on the previous quarter at 712, and were 5% lower than a year ago. London and the South-East now accounts for one-third of all UK insolvencies.

Mike Jervis, business recovery services partner at PricewaterhouseCoopers, said: 'London's economy, with its high number of suppliers in the financial services sector, is clearly vulnerable as business customers cut costs.'