The average financial strength score of active businesses reached 81.14 during October, up from 79.80 in October 2008. This indicates that businesses on the whole are in a stronger financial position than previously with a smaller chance of failure in the next 12 months.

The business insolvency rate rose from 0.09% in September this year to 0.10% in October, with 10 businesses in every 10,000 going under. This represents a slight improvement on October 2008, when the insolvency rate was at 0.11%.

Furthermore, the smallest businesses (with 1 to 2 employees) remained the most resilient, with only 0.06% of the business population failing during October. Businesses falling into this 'micro' category also demonstrated the highest improvement in their financial strength score during October, up to 82.22. This compares with 81.90 in September 2009 and 80.85 in October 2008.

Rolf Hickman, Managing Director of pH, an Experian company, said, “Throughout 2008, the average financial strength score had been seeing a downward trend, but 2009 has seen a reversal. The financial solidity of UK businesses has been improving over the year.

“This has impacted on the insolvency rate, which has remained fairly stable since July, with a slight increase in October. If the inancial strength of businesses continues to improve, we could see insolvencies maintain a low level and even start to fall.”