The effects of the credit crunch have been blamed for a sharp increase in the number of firms going into administration. The first three months of 2008 has seen an increase of 22.7 per cent in one year, whilst the number of businesses in administration presently stands at 858 – which is 54 per cent higher than the previous three months.The increase in the number of firms going bust has been put down to the far-reaching effects of the credit crunch, especially as the retail and construction industries have been badly affected, with consumers spending less and the slowdown in the housing market. Firms going into receivership are at their highest levels since 2003, with 273 businesses going into receivership in the first three months of 2008 -145.7 per cent higher than the same period in 2007. One analyst has warned that the UK is on the brink of a recession.Insolvency experts PKF told the BBC: "Clearly the credit crunch is having an impact and banks are increasingly wary of lending more money to businesses they don't regard as cast iron while other creditors are tightening their payment terms, with many starting to demand cash up front for all but their most trusted clients."