why the UK economy is lagging behind is that banks are
trying to cover up their annihilation of the real economy
by keeping failing companies going.
the zombie economy
Now, the City is warning. If interest rates go up, post
Libor scandal, there will be hell to pay, and it will all
be the government's fault, for messing with the markets!
I , for one, would love to smell napalm in the morning over
checkit: City am
50,000 zombie firms to fail if rates rise
Tuesday 13th November 2012, 1:31am
TENS of thousands of firms are set to go bust when interest rates rise, taking hundreds of thousands of jobs down with them, business troubleshooting group the Institute for Turnaround (IfT) has warned.
There are almost 150,000 zombie firms in the UK – businesses that are fundamentally broken, and only still alive because ultra-low interest rates are holding down their debt repayments.
But while some firms may be able to restructure their debts and business processes to thrive in the long run, up to 50,000 are deemed “beyond hope” by the IfT, as they can barely pay interest on their debts, let alone repay the capital.
Firms of all sizes – from two or three-person operations to big businesses employing hundreds of staff – are zombies, meaning hundreds of thousands of jobs are going to be lost when rates rise at some point in the coming years.