• MNByChoice
    link
    fedilink
    English
    arrow-up
    7
    ·
    1 year ago

    Prior to COVID-19, there were many articles about zombie companies. (Zombie companies are ones that would have failed if not for cheap credit.) Not a surprise more companies are failing.

    • Syldon@feddit.uk
      link
      fedilink
      English
      arrow-up
      1
      ·
      1 year ago

      Are you stating that we have more zombie companies since Brexit, or that Brexit created them?

      There will always be companies that earn less than others, but what is undeniable is that Brexit has made trading harder. This has pushed more into liquidation than we would have seen without it.

      • Nighed@sffa.community
        link
        fedilink
        English
        arrow-up
        2
        ·
        1 year ago

        It’s been something that I have seen mentioned occasionally throughout the last decade, because of the low interest rates it was possible for barley profitable companies to survive. Now the rates are going up it’s less so.

        • Syldon@feddit.uk
          link
          fedilink
          English
          arrow-up
          1
          ·
          1 year ago

          You always have to remember the bias of the source when reading news articles. This is the BBC is is very much the messenger government BS.

          The higher interest rates will be one of the factors, and it is mentioned in the article:

          "Businesses that had loaded up on debt at rock-bottom rates, and were only able to cling on during the pandemic thanks to government support, must now deal with a financial reality check as higher interest rates hit working capital for the foreseeable future.

          It is an easy one for government to deflect as this is driven by the BoE.

          However, all the examples the article mentions is not because of struggling with loans. Businesses state there is either a drop off in sales due to people having less money to spend. One postulates that is due to mortgage costs, with out any data to confirm that. The rest state cost of materials, mostly building materials. We import the majority of our building materials from the EU. And that would push those causes directly at Brexit, since it is our biggest reason for increased import costs.

          There is no data to confirm anything the the article states when it is pushing interest rates as being the main cause.