Page last updated at 01:05 GMT, Monday, 21 September 2009 02:05 UK

Insolvency rate 'slows in August'

River Tyne between Newscastle and Gateshead
The report said firms in England's north-east were the worst affected

The number of failing UK businesses declined by almost a quarter last month, according to a report.

A total of 1,796 firms went insolvent in August, a 23% fall from July, said credit checking agency Experian.

However, compared with August last year, the number of firms going insolvent was still up 11%.

Experian said 0.09% of UK firms failed in August, down from the 0.11% figure recorded in July. It said the latest numbers were "encouraging".

'Cautious attitude'

The agency said its own "distress index", which ranks firms between one and 100 on the likelihood of default on their debts, also showed signs of improvement after declining for a year.

"It is too early to tell whether this is an indication of a more positive outlook," said Rolf Hickman, managing director of Experian subsidiary PH.

"One thing is for sure - businesses are distinctly aware of the current environment and the need to be cautious in any business dealings."

The north-east of England saw the highest rate of insolvency during August - almost double a year earlier - while business failures in the North West and Wales were lower than a year ago.

Experian said postal and telecommunications firms were struggling the most.

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