The number of Birmingham businesses closing their doors for trading rose by 73 per cent in the third quarter, the government has announced.

Figures from the Ministry of Justice showed that the number of Birmingham companies winding up between July and September totalled 300 - an increase of 127 compared to the same period last year.

Winding up is when a company repays all its debts with the ultimate goal of closing the business down.

Business chiefs warned there would be tougher times ahead as new small and medium size businesses faced increasingly challenging economic conditions.

Katie Teasdale, senior policy advisor at the Birmingham Chamber of Commerce, said: “The fact that so many firms have decided to shut down is really a sign of the economic problems that the whole nation is facing at the moment.

“It is not a surprise that so many companies are struggling in a time when many people are saying that the current situation is worse than the Great Depression.”

“It’s quite a concern in terms of the long term situation. If businesses are shutting down rather than selling up or trying to stay open then it does not bode well for the future.

“Now is the time for leadership from all quarters. It is important not to become hysterical during these tough times. Birmingham has been through economic troubles before and we will come through this one as well.”

But Ms Teasdale added that their were some positives from the company winding up and bankruptcy petition court statistics that were released on Friday by the Ministry of Justice.

In total the number of creditors bankruptcy applications fell by seven percent to 136 and the number of debtors bankruptcy petitions remained static at 350.

Ms Teasdale said: “In some ways these figures are quite cheery.

“It shows that people are deciding to close their companies of their own accord instead of being left with the last ditch step of bankruptcy.”