UK Business Insolvencies at Six-year Low
UK business insolvency rates in January continued a downward trend to reach the lowest since June 2007, according to data from information services group Experian.
Its data shows that 0.06% of the UK business population, or a total of 1,271 companies, failed in January 2013. This marks a fall from 0.07% in January 2012 and is down from 0.08% at the end of last year.
The UK’s mid-sized firms saw the biggest fall in insolvency rates in January, as businesses with between 26-50 employees and 51-100 employees, experienced a fall from 0.20% in January 2012 to 0.14% in January this year and 0.14% to 0.07% respectively.
The largest firms – those with over 501 employees – saw their average insolvency rate fall from 0.20% in January 2012 to 0.15 per cent in January 2013.
The UK’s smallest businesses, with only one or two employees, also saw a slight fall in the insolvency rate compared to figures at the end of last year, although the picture for businesses with less than 10 employees remains broadly flat.
“Although January is typically a slow month for business insolvencies, the figures for January 2013 do show a marked decline in the insolvency rate, which in fact has hit its lowest level for over five years,” said Max Firth, managing director, Experian Business Information Services, UK and Ireland. “This follows a relatively stable 2012, which itself was an improvement on the previous year.
“High profile insolvencies so far this year show that it is still a challenging climate and businesses across all sectors and sizes need to adapt to changes in their trading environment.
“Businesses which want to secure the right deals, contracts and finance in order to grow this year need to ensure they are in the best position possible financially; this means thinking about their own credit rating and assessing what it says about them.”