THE number of people declared insolvent in England and Wales has risen to its highest level since records began in 1960, it emerged last night.

The Department of Trade and Industry reported 15,394 individual insolvencies in the three months to June 30, an increase of 11.7 per cent on the previous quarter and 36.8 per cent stronger than a year earlier.

Across the North-East, there have been 633 bankruptcies between April and June this year, compared to 431 in the same period last year.

Consumer indebtedness has increased following a string of interest rate rises, although experts said new bankruptcy rules may be a factor.

Steve Treharne, of KPMG, said lenders needed to review their credit risk and policies in light of yesterday's figures.

He added: "We have a major consumer debt problem and, if current trends continue, we could see annual bankruptcy rates at double the present level before we see any improvement."

The quarterly insolvency figure was made up of a record 11,195 bankruptcies, up 7.8 per cent on the previous quarter, and 4,199 individual voluntary arrangements.

R3, the association of business recovery professionals, said the figures came as no surprise.

Harvey Madden, of Taylor Rowlands, in Yarm, Teesside, is R3's spokesman for North Yorkshire.

He said: "Experience tells us that when consumers cut spending, the retail and leisure industry is often the first to feel the pressure from that."