£530bn Covid corporate debt mountain threatens economic recovery
Companies now owe hundreds of billions to banks after borrowing heavily to survive the pandemic this year
27 December 2020 • 5:56pm
Bank loans and overdrafts to businesses spiked to almost £530bn this year, threatening to undermine the economic recovery as companies struggle under the weight of debt.
It took corporate debts to banks up from £486bn before the pandemic struck to a peak of almost £545bn in May. The pace of borrowing peaked at £45bn in March alone.
The total has edged down since, but remains well above pre-Covid levels, even as businesses struggle to make ends meet in an economy that remains more than a tenth smaller than it was at the end of 2019.