Building and construction sees 28% rise in insolvencies

Information group Experian has warned of an "insolvency epidemic", as it revealed that insolvencies in building and construction rose 28% in January.

The company said that overall, it was companies in London and Birmingham that fared the worst towards the end of the year, with 1,221 and 381 insolvencies respectively.

Business failures as a whole rose 78% in January.

Matthew Sherwood, Experian's senior global economist said: "It looks likely that economic activity contracted by at least 1% in the final quarter of 2008.

"With the UK economy facing a sharp contraction, it seems likely that insolvencies will continue to increase over the coming quarters."