The rate of insolvencies dropped to 0.07% in August, the lowest level since June 2007, according to the latest Insolvency Index from Experian.

Over half of the UK’s regions experienced the lowest rate of insolvencies at 0.06%. Businesses in the South West led the increase in financial strength with their score rising from 82.23 in August last year to 82.73 in August 2010.

The largest businesses (more than 501 employees) were the only ones to see an increase in the insolvency rate, in comparison to businesses of other sizes, from 0.09% in August 2009 to 0.14% in August 2010.

Also, the average financial strength score for businesses increased from 80.79 in August 2009 to 81.06 in August 2010. The biggest 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, said: “This month’s picture is very different to the one we saw back in March this year when all regions