Zombies and other tales
Posted on October 15, 2013 by Jeremy Frost
A recent study has revealed that exactly 432,082 companies are now zombies, i.e. Businesses only able to survive due to the current low interest rates. They can barely cover the interest payments on their borrowings and are liable to fail should lending rates go up.
This is a very possible scenario as the “recovery” continues and unemployment falls. Apparently estate agents are the worst affected! I find this strange. We are being warned of a property bubble due to house price inflation and the Government’s “Help to Buy” initiative by no less than one of the joint winners of the Nobel Prize for Economics, Professor Robert Shiller, yet the agents handling this bubble are having problems?
Ireland will apparently become the first Eurozone country to exit an international bailout in mid-December, announces Prime Minister Enda Kenny. Not quite. Ireland will be merely drawing no more funds from its EU partners. The average maturity of the country’s debt is still 20.8 years!
Poor old Vince Cable. Not only is he being attacked over the pricing of the Royal Mail privatisation but, despite promising to get tough on “rogue” bosses, disqualifications of directors has fallen from 1333 in 2010-11 to 920 in 2012-13.
However, his department rejected these claims and said (inter alia) “We are also ensuring rogue directors who are banned from running companies abroad, cannot run British firms”. That doesn’t really deal with the point about disqualifications of directors having fallen!