Number of failing firms 'not set to rise'

Business recovery practice Begbies Traynor said there is no sign that failures will increase in spite of the challenging economic outlook because low interest rates and lenient creditors are helping keep struggling firms afloat.

The firm said: "The statistics for the first quarter of 2012 indicated the market had remained stable with a 3% increase on the comparable quarter of 2011.

"However, there are currently no signs of a material increase in volumes, in spite of the many indicators of financial stress. The board's view is that this is due to the on-going high level of monetary support, principally low interest rates, combined with lenient attitudes by creditors towards financially stressed companies."

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