UK experiences drop in insolvencies in majority of regions
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The rate of insolvencies among UK businesses has fallen in all but three regions over the past year.
Findings from the latest Business Insolvency Index from Experian shows that every UK region besides the North East, East Midlands and Eastern posted a decrease in the number of business insolvencies in July.
The biggest fall in England was recorded in the South East where 249 companies entered insolvency, a decrease of 19.4 per cent.
Within the UK, Scotland has seen the sharpest improvement. The UK region, which traditionally has some of the lowest insolvency rates, saw 65 businesses fall away in July, a fall of 25.3 per cent over the same period in 2011, and only 0.05 per cent of all firms.
During July 2012 1,776 companies, or 0.09 per cent of the business population, failed. This compares with the 1,962 firms that entered insolvency in July 2011.
The biggest improvement in business performance has been noted in the UK's largest firms of over 501 employees. Here, the rate of attrition has dropped from 0.15 per cent in 2011 to 0.08 per cent in 2012.
Smaller business with 11 to 25 workers experienced a more gradual decline, moving from 0.26 per cent to 0.19 per cent.
Max Firth, managing director for Experian Business Information Services in UK&I, comments, 'Since March this year, when the insolvency rate peaked at 0.11 per cent, it has remained fairly stable - between 0.08 per cent and 0.09 per cent.
'The lack of any real increase is clearly welcome and this picture is unlikely to change in the near future.'
Firth believes that the figures underline the importance of good insight into the financial risks associated with insolvencies.
Experian also finds that the non-food retail sector is the UK’s sixth biggest sector. However, compared to its larger counterparts, it saw the rate of insolvencies fall the furthest – from 0.15 per cent in July 2011 to 0.10 per cent in July 2012.