Business Insolvency rate improvement seen

The latest Insolvency Index from Experian, reveals a positive picture in January, with the number of business failures down by more than 10 per cent compared to January 2010. 

1,266 businesses failed in January 2011, representing 0.07 per cent of the UK’s business community compared to 1,426 in January 2010. 

The strength of the UK’s business community also improved year-on-year, with the most robust performance coming from the South west region. Wales and the North West were the only regions showing an increase in the insolvency rate over the last year. 

Max Firth, Managing Director of Experian pH, said: “Our analysis shows that business failure rates are falling steadily and the financial strength of the UK’s business community is improving.

Our data also shows that the post-recession business population is beginning to increase once again, with the net number of firms trading, up by one percent when compared with last January. 

Irrespective of the environment, firms need to be vigilant and ensure that they have good insight into the financial risks associated with insolvencies among clients and suppliers. With issues from fulfilling increased orders through to late payment, the knowledge of how these will affect cash flow is imperative.”