The number of companies going broke in England and Wales rose almost ten per cent in the last quarter-year.

Data from the Department of Trade and Industry (DTI) showed there were 4,118 company insolvencies in the three months to the end of June, a 7.6 per cent rise on the previous quarter and a 9.9 per cent jump on the same period last year.

The DTI stressed the total number of businesses had also jumped over the last year and, proportionally, the number of insolvencies remained constant.

It said 1.1 per cent of active companies became insolvent in the year to the end of the second quarter, the same as the previous quarter and the corresponding quarter last year.

A spokesman said: "The total number of insolvencies must be considered in the context of about 3.7 million UK businesses in total.

"New figures on July 31 showed that there was a net increase of more than 20,000 firms operating in the UK last year compared to the previous year.

"The annual rate of company insolvencies for the last 12 months has remained constant at 1.1 per cent for the tenth quarter running, less than half the level reached during 1993.

"It is important to wait for the next few quarters' figures before speculating whether this is a short-term effect or a longer-term trend."

Shadow trade and industry secretary Tim Yeo said the rise in business failure was not surprising.

He said: "Labour has introduced over £15 billion in new regulations since 1997 and £6 billion each year in burdensome extra business taxes. The Government should stop distracting businesses with regulations."