UK business insolvencies drop by 33%

The number of insolvencies of UK businesses in July fell by 33% compared to July 2009, according to the latest Insolvency Index from Experian.

The global information services company revealed that 1,542 businesses failed last month compared to 2,312 in the same month last year.

Most business areas and segments saw rates fall, apart from companies with more than 501 employees. Companies of between 101-500 employees saw the biggest improvement with just 30 insolvencies in July 2010, 56% fewer than in July 2009.

Scotland overtook the South-east as the region with the lowest rate of insolvencies, just 0.05% and the North-east and Wales saw the biggest improvements with insolvency rates halving over the last year. 0.09% of businesses in the North-east failed in July 2010, compared to 0.17% in July 2009, while Wales saw rates decline from 0.14% to 0.07%.

Max Firth, managing principal of pH, a division of Experian, said: “July’s data indicates that the SME population is faring much better in terms of insolvencies than it did this time last year. However, increasing failures at the top end of the market demonstrates clearly that there is a still a great deal of uncertainty. Given this ever-changing picture, it is vital that organisations ensure they understand and proactively manage the risk that those they do business with exposes them to.”