Financial strength of businesses has improved 8% year on year
The latest Insolvency Index from Experian reveals a positive picture in January, with the rate of business failures falling to its lowest point since June 2007.
Businesses across the UK saw an eight per cent improvement in their combined financial strength score, which predicts the likelihood of a business failing in the next 12 months.
The average score in January 2010 increased to 81 from 79 a year earlier (100 being the least likely to default and 1 being the most likely).
The rate of insolvencies also fell to 0.07 per cent in January 2010, which means seven in every 10,000 businesses are going under.
This compares to an insolvency rate of 0.09 per cent in January 2009 and 0.11 per cent in December 2009.
Rolf Hickmann, Managing Director of pH, an Experian company, said: “It’s encouraging to discover that not since the current financial crunch started have so few firms become insolvent in a single month. Whilst it is too early to predict whether we are fully out of the woods, this does hint at an improvement in the health of UK businesses, something which is reinforced by the financial strength view provided by January’s data.”
