One in five UK firms can barely cover debt-interest payments, says report

One in five UK firms is a “zombie,” with profits only just covering debt interest payments, according to a report by an influential Conservative think tank.

Chancellor of the Exchequer Rishi Sunak should relax the rules on repayment of coronavirus debts, Onward said, as it warned the post-pandemic economic recovery will be hampered by “crippling levels of corporate debt.”

Borrowing taken on since the Covid lockdown began in March threatens to push 4.3 per cent of companies, employing 1.8 million people, into technical insolvency, and if dissolved, they wouldn’t have assets to cover their liabilities, according to the study.

UK business have taken