Britain's smaller companies could be saddled with up to 105 billion pounds in"unsustainable" debt by March next year that will need recapitalising, a financial services body told the Bank of England on Monday.
TheCityUK, which promotes Britain's financial services sector, said in a letter to BoE Governor Andrew Bailey that businesses will require full-scale recapitalisation to alleviate the hit to employment from the pandemic, which is set to trigger the UK's worst economic downturn in 300 years.TheCityUK is assessing the likely demand for fresh capital, how much of it the private sector could provide, and explore ways with government and the BoE to plug any shortfall.
A preliminary analysis showed that the level of unsustainable debt in the sector could be between 90 billion pounds and 105 billion pounds by March 2021, TheCityUK said.