Official figures from The Insolvency Service have shown a stabilisation in the number of personal and business insolvencies. In the last three months, the number of personal insolvencies has risen by just 1% to 30,513. In addition, there has been a decrease of 5% in the number of businesses becoming insolvent, to 1,232.
This could be very positive news as it depicts an economic improvement and suggests we could be very much on our way out of the recession. The development appears to be the result of lower interest rates which has enabled people and businesses to better manage their money.
On the other hand however, it could be the case that the number of personal insolvencies starts to rise again due to the rising cost of living and increasing inflation.
With regards to business insolvencies, it seems positive that despite the sluggish growth in the economy, the number of businesses becoming insolvent and having to cease trading is not just steadying but decreasing. However, this again could be the result of an oversight. It is possible that business owners are choosing to wind down the businesses before things get too bad. This would explain the reduction in insolvencies as in this instance there would be no need to file for insolvency.
Whatever the reason for these optimistic statistics, it could well be the news that will encourage the self employed in this struggling economy.