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Business insolvency rate stabilises in September

Average business insolvencies rose by just 0.09% in September remaining stable on August levels, which is the lowest rate since September 2008.

The monthly index also revealed that the business population saw a year-on-year improvement in its financial solidity (from 80.20 in September 2008 to 80.79 in September 2009) as measured by its average financial strength score.

However, in contrast to the national trend small businesses with 11 to 25 employees saw a marked increase in insolvencies during September.

The rate of insolvencies among these businesses rose from 0.21% in September 2008 to 0.26% in September 2009. This was the biggest year-on-year increase seen by any business type. It was also the biggest month-on-month increase (from 0.21% in August).

The total number of insolvencies within businesses of this size increased year-on-year by 19% (43 more business failures than in September 2008) and month-on-month by 20% (four more business failures than in August 2009).

Rolf Hickman, managing director of pH an Experian company, said: "A flat insolvency rate in September coupled with a small improvement in the overall financial solidity of the business population is positive.

“August can be a slow month for insolvencies which may have explained the low insolvency rate but the fact that the low rate has continued into September is a good sign.

"Businesses with one to two employees alongside those with 501 employees or more had the lowest insolvency rates.

"However for some of those businesses in between the rate of failure is markedly higher. In fact over the past year businesses with 11 to 25 employees have particularly struggled having seen among the highest insolvency rates."

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