Large firms escape business insolvency spike

Firms with 501 or more staff bucked downward trend in July, according to Experian

The number of failures among large UK firms fell in July, despite a spike in the overall national business insolvency rate.

The rate increased from 0.08 to 0.10 per cent last month, on an annual comparison, according to the latest Experian insolvency index.

The financial strength of businesses in the UK also dropped, from 80.93 to 79.84, although large companies improved from 84.20 to 86.13.

Businesses employing 51 to 100 people suffered the biggest annual increase in insolvencies, as the failure rate rose from 0.15 per cent to 0.22 per cent. Firms with 11 to 25 employees saw the highest percentage of businesses fail, equating to 0.26 per cent of the population.

However, the downward trend was bucked by the largest firms, with 13 per cent fewer firms with 501 or more employees hitting the wall in July, compared with a year earlier.

Max Firth, managing director of Experian business information services, said: "When a large company becomes insolvent, it can create a domino effect in the surrounding economy, so the improvement in insolvency rates with firms with more than 500 employees is good news."