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U.K. Business Insolvencies Decline 3.1% on Mid-Size Firms

Oct. 22 (Bloomberg) -- The number of U.K. business insolvencies fell in September as failures at mid-size companies declined, Experian Plc said.

Insolvencies slid 3.1 percent from a year earlier to 1,679 companies, affecting 0.08 percent of all businesses last month, the Dublin-based Experian said today in a statement. Bankruptcies at firms with 26 to 50 employees dropped 16 percent to 92 companies, with 0.19 percent of businesses of that size affected compared with 0.23 percent a year earlier.

Data released this week may show the U.K. exited a recession in the third quarter, with economists in a Bloomberg News survey forecasting expansion of 0.6 percent compared with the previous three months. Still, the recovery may be restrained by the euro-area sovereign-debt crisis and the U.K. government’s fiscal squeeze.

“Larger firms experienced a slight increase in insolvencies” in September, “which may lead to smaller firms that were supplying to them experiencing a knock on effect,” Max Firth, managing director of Experian’s U.K. and Ireland business-information unit, said in the statement. “This highlights the need for firms need to be prudent and consider their credit management practices in order to survive.”

Building-company insolvencies were unchanged at 232 cases last month, affecting 0.14 percent of businesses in the sector compared with 0.17 percent a year earlier, Experian said. The plastics and rubber industry had the highest failure rate at 0.28 percent, followed by the health and household industry with 0.23 percent.

Across all sectors, companies with 51 to 100 employees posted a 7.3 percent increase in insolvencies to 44 cases, with the proportion affected rising to 0.16 percent from 0.15 percent.

Scotland and southwest England had the lowest rates of insolvency in Britain, at 0.06 percent of businesses affected in each region, according to Experian. Insolvency numbers in Yorkshire and southeast England increased.

To contact the reporter on this story: Rachel Morison in London at rmorison@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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