English water firms’ big debts of concern as interest rates rise, says expert

Economist says sector's financial stability is worrying as firms have borrowed heavily to pay dividends

Water companies are struggling to hold their finances in order as interest rates rise on the huge debts they have taken on to pay dividends, according to a leading economist.

Dieter Helm, a professor of economic policy at the University of Oxford and an adviser to governments, said there were worrying signs from water companies about their financial stability as the economic crisis pushes up interest rates.