Euler Trade Indemnity has avoided a potentially huge credit insurance hit with a timely withdrawal from struggling electrical retailer Powerhouse.

The announcement last week that receivers were called in to manage Powerhouse was followed by news that both Euler and Gerling NCM had withdrawn millions of pounds worth of cover earlier this year.

Euler chief executive Richard Webster said: "We started withdrawing our cover for Powerhouse when we were notified of concerns. Since then there has been no change in our strategy."

Powerhouse is believed to owe suppliers around £50m.

With carpet manufacturer Carpets International also calling in receivers last week, worries over the fragile state of the UK economy increased.

Webster said: "We did expect to see one or two companies go into receivership. We are slightly cautious, but we continue to assess each company on its merits."