The South West’s technology and IT sector is the second most stable of all 12 UK regions, with 31.5 per cent of firms at higher than normal risk of becoming insolvent, according to the latest research by insolvency and restructuring trade body R3.

The region came in just behind Northern Ireland, where 31.4 per cent of tech companies were at heightened risk of insolvency. The national average for the sector was 33.4 per cent.

Taken altogether, 26 per cent of South West firms are deemed at higher than normal risk – slightly lower than the UK average of 26.2 per cent.

Alan Bennett, R3’s South West chair and partner at Ashfords LLP, said: “The South West has continued to solidify its status as one of the top tech-hubs of the UK. The region has seen substantial growth in this sector in recent years.

“Looking at the region as a whole, South West businesses are in line with the UK average and have remained fairly steady each month. This is good news for the region and highlights the resilience of the South West’s economy, despite uncertainty for firms surrounding Brexit and the UK’s future trading relationship with the EU.”

However, the news is not as positive for the South West’s retail sector. Over a quarter (26.1 per cent) of the region's retail businesses are considered to be at greater than normal risk of entering an insolvency procedure in the next year - the highest rate of any part of the UK, with the national average at 24.2 per cent.

The region’s restaurant sector also saw similar concerns with 23.9 per cent of firms at higher than normal risk of becoming insolvent - the highest of all UK regions.

Alan Bennett added: “The difficulties encountered by some firms in the retail and restaurant sectors are a reminder that the region cannot afford to be complacent, especially with businesses that rely on continued consumer confidence.

“Although it bucked expectations after last year’s referendum, consumer confidence has started to come under pressure from rising inflation and squeezed real wage growth. This is likely to have limited every-day expenditure on non-essentials, and reduced the region’s appetite to eat out."