More than 11,000 companies have failed since January 1, figures from leading credit information company Dun & Bradstreet show.

The total of 11,093 is up from 9,185 in the same three months in 1998, an increase of 21 per cent.

The worst-hit region was the East Midlands, where business failures increased by 62 per cent.

Wales and the South-West saw business failures increase by more than 40 per cent and the West Midlands by 37 per cent.

The South East, including Sussex, saw a total of 2,085, a rise of 14.4 per cent.

Philip Mellor, senior analyst at Dun & Bradstreet, said: "The sudden increase in failures is a reflection of the slowdown in the economy and is a cause for concern."

But Mr Mellor added the failure rate was still much lower than at the height of the last recession.

In the last three months of 1992, more than 16,000 businesses failed.

Dun & Bradstreet's figures include both bankruptcies, when a company collapses unable to pay its bills, and liquidations, when a company stops trading and its assets are sold off.

Failures among larger companies increased by 10 per cent while small business' bankruptcies jumped by 32 per cent.

Mr Mellor said part of the reason for the rise was the large number of business start-ups in 1995 and 1996.

Such small young businesses are at their most vulnerable and can easily fall victim to an economic dip.

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