A lobby group has written to the Bank of England governor, Andrew Bailey, to warn that UK businesses are racking up an “unsustainable” debts mountain of £90bn to £105bn because of the Covid-19 pandemic.
TheCityUK which brings together leaders from across the financial and related professional services industry – suggests that by March 2021, the level of unsustainable debt held by UK Private Non-Financial Corporations (PNFCs) could be up to £90 to £105 billion, of which CBILS lending could contribute £10 to £20 billion.
If left unresolved, these levels of unsustainable debt could inhibit employment, research and development, investment and ultimately a smooth economic recovery back to growth.
Miles Celic, Chief Executive Officer, TheCityUK, said,
The economic lockdown created by the pandemic has required unprecedented interventions. Businesses have been put into suspended animation until they can safely reopen. This was absolutely the right thing to do, but it means the job is not yet done. The economy will need to be reawakened as part of its process of recovery.
“Our industry is determined to play its part in getting the country back on its feet. Working at a pace and with real determination, firms across the industry are collaborating to identify a financially viable pathway to recovery and a return to long-term growth for UK businesses.”
