Overcast

Overcast

max temp: 11°C

min temp: 8°C

ESTD 1874 Search

East Anglia: ‘Zombie’ companies a challenge for region’s economy, warns R3 leader

12:30 23 November 2012

Shay Lettice of Peters Elworthy & Moore, eastern region chairman of R3

Shay Lettice of Peters Elworthy & Moore, eastern region chairman of R3

Roger Adams Photographer 2011

“ZOMBIE” companies which are able to pay the interest on their debt but cannot pay off the debt itself represent a major economic challenge for the East of England, according to the regional head of insolvency trade body R3.

shares

According to new figures compiled by R3, there are now 160,000 “zombie” businesses across the UK, a 10% increase compared with three months ago, representing around one in 10 of the nation’s companies.

And R3 says that the figures provide evidence to support a pronouncement earlier this month by Bank of England governor Sir Mervyn King that Britain “may be in for a period of persistently low growth”.

“Zombie companies are symptomatic of a stagnant economy, with a combination of low interest rates, low liquidation rates and many businesses running at a loss,” said Shay Lettice, eastern region chairman of R3.

“Whilst the R3 research highlights that the proportion of zombie companies operating in the East of England is less than the overall national figure, there is still a large enough number to indicate a sizeable economic challenge for the region.

“The banks are displaying greater forbearance on existing debt, but when a business cannot get extra lending, it is unable to recover and expand.”

However, Mr Lettice, a partner at Peters Elworthy & Moore, added: “On a more positive economic note, corporate insolvency rates remain historically low, especially when contrasted with previous recessions.

“Low insolvency rates are good for employment, and our relatively flexible insolvency regime has allowed many insolvent businesses in our region, especially in the retail sector, to emerge from administration with jobs or stores intact.

“Corporate insolvencies have traditionally tended to spike in early recovery but, so far, this recession is re-writing the rules.”

shares

0 comments

Sainsbury's chief executive Mike Coupe.
Photo: Sainsbury's/PA Wire

The City will this week look for details of how Sainsbury’s plans to overhaul Argos when the supermarket posts its annual results next week, while trading at rival Morrisons and banking giant HSBC will also be in the spotlight.

Avanti supports CLIC Sargent charity

Networking group getting Muddy and wiggy for young cancer patients

Nick and Kim Hoare from Ivy Grange Farm near Halesworth who run a glamping site with five yurts.
Photo: Nick Butcher

A glamping firm hoping to banish memories of sodden sleeping bags and leaking tents is catching the eye of campers after an upmarket break.

Royal Bank of Scotland has reported a sharp increase in first quarter losses.

Royal Bank of Scotland has reported a first-quarter pre-tax loss of £968million, more than double last year’s figure of £446m.

Tom Boother is running from Land's End to John O'Groats in aid of EACH and Great Ormond Street. Marquis Suffolk is lending Tom a motorhome for him to sleep in during the challenge.

Tom’s charity challenge - running 816 miles from Land’s End to John O’Groats

Most read

Great Days Out

cover

Click here to view
the Great Days Out
supplement

View

Most commented

HOT JOBS

Show Job Lists

Streetlife

Newsletter Sign Up

Great British Life

Great British Life
MyDate24 MyPhotos24