The number of companies facing “critical problems” surged by more than a quarter between the first and second quarter of the year as tightening credit conditions continued to bite, according to Begbies Traynor, the corporate insolvency and restructuring specialist.

Year-on-year comparisons in the company’s Red Flag Alert survey show a near eightfold rise in financially troubled companies in the second quarter. The survey showed 4,258 companies facing winding-up petitions from creditors or county court judgments in excess of £5,000, compared with just 542 in the same period a year ago. Quarter-on-quarter, the number of companies facing critical problems increased by 29 per cent.