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Insolvent firms rate at lowest for three years

Business insolvencies in Scotland are at a near three-year low, according to new data released today.

The monthly Experian BusinessIQ Insolvency Index found there were just 45 cases in Scotland during October.

That was down more than 50% year-on-year and at the lowest level since November 2009.

Across the UK only two areas – eastern England and the south-west – saw increases when compared to 2011.

Overall, insolvencies in the UK were down 8.7% to 1685, or around 0.08% of the entire business population.

Yorkshire and Wales experienced more than 60% reductions in their figures and although London had the highest number, at a total of 443, it showed a 4.1% decline.

Almost all small and medium businesses saw their rate of insolvency stay steady or drop.

However, there was a 50% increase, to 18, in the number of companies employing more than 501 staff which fell into insolvency in October, with sports retailer JJB Sports one high-profile victim.

Building and construction firms continue to be adversely affected by the difficult economic environment and reported a 5.4% increase to 253.

Motor traders also appeared to be under pressure with a 15% rise to 45.

Business services was the sector with the most insolvencies at 381, although this was down almost 19%.

Max Firth, from Experian, said: "Following the peak in March this year at 0.11%, the insolvency rate fell to 0.08% and has remained fairly steady each month since.

"It shows that insolvencies are indeed stabilising, but the increase during October in large business failures highlights the need for ongoing monitoring of all clients and suppliers, regardless of size.

"As firms start to show signs of stability and, in some pockets of the UK, growth, they need to remain prudent in order to prosper."

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