The number of companies failing in the three months to the end of September months increased by 17.9% in the UK compared to last year.

In Ireland the number of company failures went up 30%.

Germany also saw business failures increase in the three months - by just over 5% - but the rest of Europe saw the rate fall.

The picture of an ailing Britain and Ireland emerged in the latest report from business information company Dun & Bradstreet, which keeps a constant watch on company performance across Europe.

Gloomy warning

The report also warned that the outlook for the UK, Ireland and Germany was "far from encouraging" as the rate of business failures seemed to be getting worse.

Scandinavian countries appear to be entirely immune to the world's economic trends, with far fewer business failures in the last three months than in the same period in 1997.

Sweden saw 21.8% fewer company failures and Norway 18.6% fewer. Finland, France and Italy also saw the number of companies going under fall by between 14% and 16% over the three months.