£36bn of government-backed loans will be toxic, taskforce warns

Report finds businesses will have 97bn-107bn worth of unsustainable debt by March

A City taskforce is warning that up to 36bn worth of government-backed business loans could turn toxic by next year, as companies struggle to repay growing debts during the Covid-19 crisis.

An interim report by the Recapitalisation Group, led by EY and lobby group TheCityUK, projects that businesses will be saddled with 97bn-107bn worth of unsustainable debt by March 2021. A third of that total will come from government-backed loans.