by Business Editor Trevor Sturgess

Recession has triggered a 56 per cent rise in the number of businesses going bust.

There were 4,941 compulsory liquidations and creditors’ voluntary liquidations in England and Wales in the first quarter of 2009, a rise of 56 per cent on the same period a year ago.

The total was made up of 1,579 compulsory liquidations (up 43.6 per cent), and 3,362 creditors voluntary liquidations (up 62.5 per cent).

According to The Insolvency Service figures, 1 in 130 active companies went into liquidation, up from 1 in 150.

There were 29,774 individual insolvencies in England and Wales in the first quarter of 2009, up 19 per cent on the same period a year ago.

This was made up of 19,062 bankruptcies (up 23.4 per cent) and 10,713 Individual Voluntary Arrangements (IVAs) - up 11.8 per cent.

Jane Moriarty, restructuring partner for KPMG covering Kent and the South East, said: "The jump of over 50 per cent on last year’s figures is a staggering reminder of how quickly the recession has knocked down many businesses in its path.

"The manufacturing industry makes up the second largest number of all insolvencies and has seen a rise of 28 per cent in the last quarter (257 up from 201); paper publishing and printing has seen the largest increase at just under double last quarter’s numbers (51 up from 28).

"These figures highlight the severity of the problems seen in retail and manufacturing, which have been battered by the drop off in consumer demand."

Hotels and restaurants were hard hit. Ms Moriarty added: "While the hotel and restaurant sector makes up a small percentage of the overall figures, the most dramatic increase of nearly 300 per cent has been seen in hotels (31 went into administration this quarter compared with 11 in the previous quarter)."

"The financial sticking plasters which were applied to struggling companies when liquidity was still available are now coming away and lenders are unwilling to reapply them. We expect to see the rate of insolvencies gathering pace over the coming months."