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30 September 2011 | Adam
The rate at which UK
businesses are becoming insolvent has dropped to its lowest rate since
February, according to a report.
The Experian Insolvency Index for August, published today, reports that 0.8 per cent of UK
businesses became insolvent during the month, down from 0.10 in July and 0.9 in
June. However, year-on-year the rate has risen, with August 2010 reporting a
rate of 0.7. According to the Experian figures, 1,563 companies became
insolvent in August.
Despite the fact that the
rate has eased compared with recent months, caution is still urged. Max Firth,
managing director, Experian Business Information Services, said: “While
insolvency rates in August were the lowest since February 2011, our analysis
shows that regional variances continue to underline the importance of closely
monitoring the financial health of the suppliers and customers that companies
do business with.”
The report also found a
significant difference in regional insolvency rates, with North East and West
Midlands reporting a rate 0.11, the highest score in the UK.
Earlier this month, the
North East Chamber of Commerce (NECC) called on the government to scrap its plan to award National Framework Contracts for construction projects because it would put medium-sized businesses in the
region at risk.
Ross Smith, head of
policy, NECC, said: “National frameworks are squeezing medium-sized companies
from both ends – and yet these are the very companies that the government needs
to grow if we are to rebalance the economy and kick-start north east growth.”
The South West region
performed the strongest, with a rate of 0.06.