Insolvencies Hit Lowest Rate for 30 Months
The rate of business failures fell to its lowest level in January this year since June 2007, figures from credit reference agency Experian have revealed.
Its monthly Insolvency Index found that the number of businesses going under in January 2010 dropped to seven in every 10,000 firms — or 0.07%. This compares with 0.09% in January 2009 and 0.06% in June 2007.
The research found that firms with just one or two employees had the lowest rate of insolvencies, with just four out of every 10,000 firms failing in the first month of this year. Experian attributed this to the lower overheads associated with employing fewer staff.
“It’s encouraging to discover that not since the current financial crunch started have so few firms become insolvent in a single month,”
said managing director of Experian firm pH, Rolf Hickmann.
“While it’s too early to predict whether we are fully out of the woods, this does hint at an improvement in the health of UK businesses.”
However, the British Chambers of Commerce (BCC) warned that the economy still had some way to go and said that small firms should remain wary.
“The figures should not feed complacency about the underlying health of the UK economy,”
said BCC spokesman, Sam Turvey.
“Not only is the Government withdrawing many of the emergency stimulus measures such as the car scrappage scheme, but the dire state of the public finances still needs to be corrected. There are difficult times ahead for both the economy and businesses of all sizes.”
According to the Experian data, firms in the South West had the lowest rate of business failures in January, while Yorkshire had the highest, with 13 out of every 10,000 firms going under.