The number of UK firms going bankrupt in August was the lowest number since last September when the collapse of Wall Street bank Lehman Brothers sent shockwaves across markets and economies around the world, a survey shows.
Business information firm Experian's new monthly Insolvency and Distress index reveals the number of business insolvencies last month was up 11.3% to 1,796, compared to August last year - the lowest rate in 13 months.
The data, which also measures the likelihood of business failures in the near future, also revealed a modest improvement in the financial health of UK businesses.
The index shows an average distress score of 80.79 in August, up from 80.61 in July.
- Company bankruptcies in the North East was up 92.7%,
- Business failures in Wales dropped 31.7%
- Firms with five employees or less proved to be the most resilient
- Postal and telecommunications businesses saw the highest levels of financial distress and insolvency rate
Rolf Hickman, managing director of pH, an Experian company, called the data "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 says.
"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," he adds.
He also points out that while the total number of insolvencies is close to the total number in the last recession, the insolvency rate is no where near as high.
This should be taken into account when assessing the affect of the recession on the UK economy.
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