The UK business failure rate has fallen to its lowest since September 2008, according to credit-checking agency Experian.

Experian’s August index revealed that 0.09 per cent of UK firms hit the wall last month, down significantly from 0.11 in July and the lowest rate this year.

Experian’s ‘distress score’, which denotes the financial solidity of the UK business population, also improved to its highest level in 12 months.

In total 1,796 firms went down the tube in August. Despite the dramatic monthly fall, that figure is still up 11 per cent on an annual comparison. The number of IT-sector failures fell five per cent year on year to 59.

Firms based in the North East region were the hardest hit. The business failure rate there stood at 0.20, up 92.7 per cent compared to August 2008.

Very small firms with five or fewer employees were the most resilient with an insolvency rate of just 0.05 per cent.

Rolf Hickman, managing director of pH, an Experian company, said: “Although it is too early to tell whether this is an indication of a more positive outlook, one thing is for sure: businesses are distinctly aware of the current environment and the need to be cautious in any business dealings.

“We have seen a significant increase in businesses monitoring the health of suppliers, customers and partners, as well as themselves, in order to ensure they do not suffer from the impact of another business becoming insolvent.”