The number of businesses ceasing trading in the UK has declined, according to data released by the Insolvency Service.

Just fewer than 4,000 businesses entered liquidation in the quarter to September, down 14% on the same three months last year and 2.2% on the previous quarter this year.

The number of individuals declaring themselves insolvent also fell, with 33,935 personal insolvencies in the quarter to September - 3.7% fewer than during the same period in 2009.

Despite the number of firms and individuals going bankrupt declining there are fears that many businesses and people are living on the edge of their credit and that government cuts could push them over the edge.

"The high numbers of people filing for bankruptcy is unfortunately becoming the norm, and whilst today's figures are down. We should not take this drop as a necessary sign of things to come," said Louise Brittain from Deloitte.