UK debt risks likely to stay below historical peaks – BoE analysis
But firms are increasingly vulnerable to rising interest rates, economists find
The share of firms with a very high debt load is likely to stay below historic peaks, even as many companies struggle with rising interest rates, Bank of England economists find.
The analysis, published today (August 22), compares firms’ interest coverage ratios (ICR) over time. The ICR is given by dividing a firm’s earnings before tax and interest by its interest expenses.
Medium-sized firms tend to have higher debt burdens relative to their earnings, the BoE economists find. Around 60% of
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