Newspaper article Manchester Evening News

Corporate Returns 'Likely to Disappoint' Says IOD

Newspaper article Manchester Evening News

Corporate Returns 'Likely to Disappoint' Says IOD

Article excerpt

A rise in interest rates in 2016 will make borrowing less attractive for large companies and put an end to the trend of increasing profits, a leading business group has predicted.

The Institute of Directors said profitability of UK companies had reached all-time highs but believes things will change in the coming year. The IOD said 2015 may have been "as good as it gets" for jobs, with employment possibly falling slightly from its current record high.

The directors' group also predicted improved productivity, which it said is likely to return to its long-term trend rate of growth in 2016.

James Sproule, chief economist at the IOD, said: "We have been living in a world of extraordinarily low interest rates for eight years, and are now at risk of seeing asset bubbles develop. …

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