KPMG forecasts increase in insolvencies

By MoneyhighStreet Staff. Published on November 6, 2008 This post currently has no comments.

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The number of people declaring bankruptcy or taking out Individual Voluntary Arrangements (IVAs) was on the up in the third quarter, KPMG has suggested.

According to the accountants, personal insolvencies are likely to have risen from 24,500 in the second quarter to 27,000 in the third.

People are finding themselves increasingly unable to meet their debts due to the credit crunch and subsequent economic downturn.

Inflation has also risen recently to a 16-year high of 5.2 per cent.

Mark Sands, director of personal insolvency at KPMG, said: "We''re predicting that the overall [July-September] personal insolvency figures are likely to show further increases both quarter-on-quarter and annually.

"We believe the bankruptcy statistics will increase by a small amount and that IVAs are likely to be up on the third quarter, but slightly down on the year."

Over the last quarter, the UK economy shrank by 0.5 per cent.

Unemployment figures are also widely predicted to rise by 200,000 before the end of the year.