The number of businesses failing in the UK fell by more than 10% in January on the same period last year, according to the latest Insolvency Index from Experian.

The index reveals 1,266 businesses failed in January 2011 compared with 1,426 in January 2010. 

Meanwhile, the strength of the UK’s business community also improved slightly year-on-year, with its overall financial strength score improving from 81.16 in January 2010 to 81.49 this year.

Max Firth, managing director of Experian pH, says: “Our analysis shows that business failure rates are falling steadily and the financial strength of the UK’s business community is improving.

“Irrespective of the environment, firms need to be vigilant and ensure that they have good insight into the financial risks associated with insolvencies among clients and suppliers.”