UK business failures fall in Q3

The number of UK business failures eased significantly in the third quarter in yet another sign that the UK economy is picking up.

According to credit reference agency Equifax, 7,674 UK firms went under between July and October, down 14 per cent on Q2.

Although business failures were up 13 per cent on an annual comparison, that is down significantly from the 38.5 per cent year-on-year rise recorded in Q2 and 35 per cent rise in Q1.

The number of business failures in both Wales and the North East fell by over 25 per cent on a quarterly comparison. The North West saw the smallest decline at 6.5 per cent, followed by the South West (7.5 per cent), Yorkshire & Humberside (7.8 per cent) and Scotland (eight per cent).

Neil Munroe, external affairs director at Equifax, said: “This is the first quarter for over a year when we have seen every region of the country and every business sector report a drop in failures.

“And this must give businesses in general and the UK economy as a whole some confidence that the extreme difficulties we have been experiencing may be lessening.”

Channel-specific figures out last week from Graydon also painted an improving picture of the market as the number reseller insolvencies fell 12 per cent year on year to 61.

However, Munroe tempered his message with a note of caution. “We must remember this is just one quarter and we need to see consistent improvements over a number of Quarters before we can be fully confident that we are out of the recession. And, as has already been stated by a number of economic commentators, it is crucial that these early signs of recovery are not over-stated.”