Company failures have plunged to their lowest level since early 2008 in a boost to hopes over the health of Britain's businesses.
Company liquidations in England and Wales fell 15.8% year-on-year to 3,619 in the first three months of 2013, and were down 5.3% on the prior quarter, according the Insolvency Service.%VIRTUAL-SkimlinksPromo%
But while the number of liquidations was the lowest since the second quarter of 2008, some insolvency experts warned there might be worse to come if the plight of "zombie" companies - kept afloat by record-low interest rates - worsens.
The liquidation rate of 0.7% of the 2.6 million active companies in England and Wales was down from a peak of 2.6% in 1993 and below the average of 1.2% over the past 25 years.
Alan Hudson, partner and head of restructuring at Ernst & Young, said the figures are "another sign that the UK economy is finally starting to move in the right direction". Data last week showed the economy grew by 0.3% in the first quarter of the year.
Other corporate insolvencies, such as receiverships and administrations, fell 27.5% year-on-year to 935 in England and Wales. Notable administrations during the quarter include entertainment retailer HMV, camera store chain Jessops and youth fashion chain Republic. Liquidations in Scotland plunged 70% to 113 year-on-year, and were down 50.5% in Northern Ireland to 55.
Graham Bushby, restructuring and recovery partner at Baker Tilly, said: "While on the face of it, a continued decline in formal corporate insolvency is good news for the UK economy, zombie companies - those that are just about able to survive by servicing the interest on their loans - remain a feature of the UK corporate landscape."
Compulsory liquidations - where a court enforces a winding-up order - rose 11.8% from the final quarter of 2012, which Mr Bushby said could suggest HM Revenue & Customs getting tough on unpaid tax bills.
Companies have been helped by the cheaper cost of finance, held down by the Bank of England's record-low benchmark rate of 0.5%, plus other stimulus measures such as the state's Funding for Lending Scheme.
But Stewart Baird, director of business investment company Stone Ventures, said: "A relatively benign insolvency landscape should not be mistaken for an economy in a state of good health. There is something artificial about the current liquidation rate and I suspect we may see corporate insolvencies start to rise again at some point."
High Street casualties
Company failures lowest since 2008
Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.
Loyal customers didn't have go without the family favourite store for long however as it reappeared online as Woolworths.co.uk in 2009, after Shop Direct Home Shopping bought out the Woolworths name.
The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.
Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.
Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.
La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.
Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.
Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.
Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.
Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.
The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.
Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.
Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.