The latest Insolvency Index from Experian®, the global information services company, has revealed that the rate of insolvencies decreased to 0.07% in August, which is the lowest point since June 2007.

In addition, the average financial strength score for businesses increased from 80.79 in August 2009 to 81.06 in August 2010. The biggest increase in financial strength came from the smallest businesses (with 1 to 2 employees) - from 81.32 in August 2009 to 82.22 in August 2010.

Max Firth, Managing Principal of pH, an Experian company, said: “This month’s picture is very different to the one we saw back in March this year when all regions, bar one, saw an increase in insolvencies and the rate was almost double at 0.11 per cent. August’s figures also show an easing off of the North South divide we saw in June, with the North East going from the region with the highest insolvency rate to one of the seven regions that shared the lowest insolvency rate of 0.06%. It continues to be evident how quickly fortunes can change and the importance of closely monitoring the financial health of the suppliers and customers that businesses of all sizes deal with.”

Other key highlights include:

Over half of the UK’s regions experienced the lowest rate of insolvencies at 0.%
Businesses in the South West led the increase in financial strength with their score rising from 82.23 in August last year to 82.73 in August 2010.
The largest businesses (more than 501 employees) were the only ones to see an increase in the insolvency rate, in comparison to businesses of other sizes, from 0.09 per cent in August 2009 to 0.14 per cent in August 2010.
The Leisure and Hotel industry saw the biggest increase in financial strength, going from 78.10 up to 79.34 in August 2010.
The financial strength of businesses in the Food Retailing sector fell the furthest - from 78.58 in August last year to 75.74 this year, making it the sector with the lowest score.