'Zombie firms' a major drag on UK economy, analysis shows

One in seven companies would have collapsed were it not for low interest rates, says KPMG

A rising number of underperforming "zombie firms" are creating a major drag on the UK economy and threaten to exacerbate a future downturn, says a new analysis by KPMG.

As many as one in seven UK firms are potentially "under sustained financial strain" and had been able to "stagger on" partly thanks to low interest rates, the accountancy firm warned. These struggling firms are crowding out healthy rivals, when under more normal economic circumstances they would probably have ceased trading.