Insolvency rate drop

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Yorkshire has become the only part of the country to record a fall in the rate of insolvencies, according to business information specialist Experian.

The company’s latest Business Insolvency Index shows the rate of insolvencies in the region fell by almost a tenth in May, compared with the same period in 2011.

Only one other region recorded a fall – the South East, where insolvencies were down by more than a 20th.

The rate of insolvencies across the UK rose by 10 per cent in the same period, says Experian. Firms with fewer than 25 employees suffered worse, according to Experian.

Max Firth, managing director for the company’s UK business information services division, said: “By the time a firm grows to six to 10 employees, the flexibility it benefited from as a micro business begins to disappear. Fixed overheads become greater and cash flow starts to cause more serious issues if not carefully monitored.

“Our data has shown that historically, the highest insolvencies have consistently been experienced by firms that have between 10 and 100 employees.’’