INCREASING interest rates have forced 23 per cent more companies in the region into insolvency.

A survey by PricewaterhouseCoopers (PwC) found that 69 North-East companies entered insolvency in the third quarter of this year, an increase of 23 per cent on the same period last year.

Business recovery experts at PwC, in Newcastle, said it was evidence that the interest rate rises this year were beginning to have an effect.

The marked increase in the North-East is higher than that of the UK as a whole, where research showed the number of insolvencies increased by just over five per cent in the third quarter.

However, the region accounts for less than three per cent of UK corporate insolvencies.

Sean Hamilton, business recovery services director at PwC said: "We believe it is too early to call whether this quarter's increase is part of a more permanent trend.

"The total number of insolvencies for the first nine months of 2004 is still lower than the comparative period last year.

"Figures for the full year will provide a better indication as to the overall effect interest rates are having on the local economy in the longer term."