Business failure accelerated across the south east last year, with a sharp increase in the last quarter of 2008.

The number of businesses collapsing went up by 17.8 per cent for the year as a whole, but in the final three months, there was a 31.8 per cent year-on-year rise.

Figures by Equifax, the business information provider, reinforced the British Chamber of Commerce claim that there had been a frightening deterioration in the UK economic situation.

Nationally, Equifax found the overall rate of business failure had jumped 18.2 per cent, with a 32.1 per cent rise in the last quarter of 2008.

Construction saw the greatest year-on-year increase in failures, with 32.4 per cent more businesses folding in 2008 compared to 2007.

And the last quarter of the year was particularly hard for this sector with a 54.7 per cent increase in failures compared to the same period in 2007.

The Retail sector was the next hardest hit, with a 23.9 per cent increase in failures for the whole of the year. And, as all the headlines in the last month have proved, the last quarter of 2008 was very difficult for the sector with a 42.5 per cent increase in failures compared to the same period in 2007.

Transport and communications sector, which is heavily dependent on the construction and retail sectors for its business, saw a 17 per cent increase in failures in 2008.

Failures in services went up by 13.8 per cent, closely followed by manufacturing sector at 11.2 per cent.

The sector that appeared the most resilient in 2008 was wholesale, with a 7.2 per cent increase in failures for the year as a whole. And this resilience appeared to hold through to the end of the year with only a 14.1 per cent increase in failures in Quarter 4 2008 compared to the same period in 2007.

Equifax external affairs director Neil Munroe said the figures showed the real consequences of the downturn in consumer confidence, combined with continued restrictions on lending to consumers and businesses.

"To see the number of businesses going bust for the whole of the year rise so significantly is very worrying," he said. "But what is equally worrying is the increases in failures in the last quarter of the year. "

He added: "These figures reinforce what every economic commentator is saying - that we are not yet at the turning point of the recession, with the numbers of businesses going to the wall highly likely to continue to increase in 2009."