Insolvencies in the West Midlands have dropped to their lowest rate since June 2007, according to new research.

Last month companies in the region unable to pay their debts dropped by more than half compared to October last year, according to the latest BusinessIQ Insolvency Index from Experian.

A total of 119 companies in the region were hit by insolvency in October, a drop of 51.8 per cent compared to October 2011.

Last month’s insolvencies were 0.07 per cent of the business population, much less than the 0.16 per cent recorded in October 11.

Nationally there was an 8.7 per cent fall in October, compared to the same month last year.

The figures highlight an increasingly stable picture among businesses, with the data showing that 0.08 per cent of the business population or 1,685 companies failed in October 2012, compared to 0.10 per cent in October 2011.

Max Firth, managing director, Experian Business Information Services, UK&I, said: “Following the peak in March this year at 0.11 per cent, the insolvency rate fell to 0.08 per cent and has remained fairly steady each month since.

“It shows that insolvencies are indeed stabilising, but the increase during October in large business failures highlights the need for ongoing monitoring of all clients and suppliers, regardless of size.

“It’s good to see that some of the bigger improvements were among the mid sized firms that typically tend to suffer the most due to their size.

“As firms start to show signs of stability, and in some pockets of the UK, growth, they need to remain prudent in order to prosper.”