Number of insolvent firms doubles

Many firms are struggling with the effects of the credit crunch

The number of firms going bust in Scotland has more than doubled in the last year, statistics show.

Figures from the Companies House register showed that 371 firms went into liquidation or receivership in the last three months alone.

The rise marked a 28% increase on the previous quarter and 119% on the same period last year.

Experts say the credit crunch has left many firms struggling with late payments and higher bank charges.

As the Bank of England delivered the biggest cut in interest rates in its 11-year history, Bruce Cartwright, from the Institute of Chartered Accountants in Scotland, told BBC Radio Scotland that the average business was now making contingency plans for a recession.

He said: "The lack of consumer confidence hits the retail sector first. We see that in the slowdown.

"The consumer is finally not buying. They have spoken for a long time that 'I intend not to buy' - now they are definitely not buying.

"The reduction in credit we are seeing in retail we are absolutely seeing in house sales and you can see that in the statistics."