The rate of business insolvencies in August fell to its lowest point in three years, according to the latest Insolvency Index from global information services company Experian.

The data shows that the rate of insolvencies dropped to 0.07% in August, which is the lowest level since June 2007.

Meanwhile, the average financial strength score for businesses rose from 80.79 in August 2009 to 81.06 in August 2010. The largest increase in financial strength came from the smallest businesses (with one to two employees) - from 81.32 in August 2009 to 82.22 in August 2010.  

Max Firth, managing principal of pH, an Experian company, says: “This month’s picture is very different to the one we saw back in March this year when all regions, bar one, saw an increase in insolvencies and the rate was almost double at 0.11%. August’s figures also show an easing off of the North-South divide we saw in June, with the North-East going from the region with the highest insolvency rate to one of the seven regions that shared the lowest insolvency rate of 0.06%.”