Business failures will rise by 18%, according to new research.

The research, from accountants BDO Stoy Hayward, found that the number of insolvent firms would rise by 18% over the next two years, compared with an 11.4% prediction in December.

The BDO Industry Watch report showed that the number of firms entering administration has increased by 54%, with company liquidations up 2% on the previous quarter.

Shay Bannon, business restructuring partner at BDO Stoy Hayward, told the Guardian newspaper: “This is a sure sign that the impact of the credit crunch is going to have a bigger lag than expected on UK business.”