The UK economy is “riddled with zombie companies” that cannot withstand a rise in interest rates. Productivity is key.
John Weeden, comments:
Andy Haldane’s take on interest rates and productivity initially appears counter intuitive; a short term hike in interest rates would increase business failure by 10% due to the inability for businesses to service their debt. However, this immediate purge of zombie businesses could deliver a much-needed 2% increase in productivity. Is the reward worth the risk?