Number of UK business closures falls

20 September 2009

21 September 2009 | Allie Anderson

The number of UK firms going bust has been declining over the past 11 months but is still higher than a year ago, according to research by information services company Experian.

Business failures totalled 1,796 in August, a decline of 23 per cent compared with July and the lowest monthly rate so far this year. This figure, however, still represents an increase of 11.3 per cent on the number of insolvencies in August 2008.

Experian's distress score - which predicts the likelihood of an organisation folding in the near future - also reached its best level in a year last month, providing hope that insolvency rates may continue to decline.

Rolf Hickman, managing director of pH, part of Experian, described the results as "encouraging".

"Although it is too early to tell whether this is an indication of a more positive outlook, one thing is for sure: businesses are distinctly aware of the current environment and the need to be cautious in any business dealings," he said.

"We have seen a significant increase in businesses monitoring the health of suppliers, customers and partners, as well as themselves, in order to ensure they do not suffer from the impact of another business becoming insolvent."

Last month Experian launched a monthly 'Insolvency and Distress Index', which enables users to view the number of UK companies ceasing to trade.

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