UK insolvency rates see October increase

Posted 24/11/2009

The number of UK companies facing insolvency increased slightly in October, despite an overall rise in the strength of British business, according to research.

Global information services company Experian has published its latest insolvency index, which reveals that the business failure rate last month was 0.10 per cent, up from 0.09 per cent in September.

This echoes the findings reported last month by accountancy group Tenon, which attributed the rising insolvency problem to economic conditions such as low consumer demand and a scarcity of funding.

However, this remains lower than figures recorded in October 2008, with smaller businesses proving most resilient to the threat of insolvency.

Rolf Hickman, managing director of Experian’s business information company pH, suggested that encouraging indicators relating to overall corporate strength could mean this situation will soon improve.

He said: “If the financial strength of businesses continues to improve, we could see insolvencies maintain a low level and even start to fall.”