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Business insolvency rate in the UK hits 5 month low

of insolvencies dropped to 0.08 per cent in August, its lowest point since February.

There was a marginal increase when compared to the rate in August last year when 0.07 per cent of the business population became insolvent. The overall financial strength score of businesses in the UK dropped from 81.06 in August 2010 to 79.18 in August this year. However, large companies saw their financial strength score improve from 81.06 to 85.91.

It was also the largest companies that saw insolvencies drop year on year with the rate dropping from 0.14 per cent to 0.09 per cent this year. Businesses employing 11-50 employees performed the worst in August with the highest rate and 0.21 per cent of the business population failing.

In terms of regions, the North East and West Midlands had the highest rate of insolvency in August at 0.11 per cent. Yorkshire and the East Midlands were the most improved going from 0.13 per cent to 0.10 per cent and 0.09 per cent to 0.07 per cent respectively. The South West was the best performing region with the lowest insolvency rate with 0.06 per cent.

All sectors saw a fall in financial strength score, lead by Utilities companies who saw the biggest drop of all the sectors from 79.62 last year to 76.55 in August 2011. Oil companies remain at the top of the table with the highest score at 80.74 in contrast to Food Retailers still at the bottom with 74.22.

Max Firth, Managing Director of Experian Business Information Services, said: "While insolvency rates in August were the lowest since February 2011, our analysis shows that regional variances continue to underline the importance of closely monitoring the financial health of the suppliers and customers that companies do business with."

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