Nearly 30,000 businesses will fail in 2024, economists warn

Prices are still far higher than pre-pandemic, and the ongoing squeeze from interest rates will depress spending through next year, Ms Sumner said.

Concerns around corporate insolvencies and ballooning debt have led some economists to warn that a global financial reckoning is looming.

Georges Ugeux, a former vice president for the New York Stock Exchange’s international and research arm and a lecturer in International Banking and Finance at Columbia University School of Law, said the financial system was far too complacent over soaring debts and volatile inflation.

Mr Ugeux said: “I think we are in danger of a serious financial crisis that nobody talks about because of the level of debt of the governments and corporations that have been able to borrow at very cheap rates.”

In the UK, public debt levels rose above 100pc of gross domestic product for the first time since 1961 in May, while in the US, public debt stands at 120pc of GDP.

Mr Ugeux said: “There is no exit strategy. We cannot go forever in the direction we have been going.”

In the UK, higher borrowing costs mean the Treasury is expected to spend £100bn more on interest payments in the next five years than predicted back in March.

The US government now faces annual debt servicing costs of more than $1 trillion (£780bn), according to analysis by Bloomberg.

A quarter of the British government’s debt is also indexed to a measure of inflation, meaning that it rapidly becomes more expensive amid rising consumer prices.

Raphael Gallardo, chief economist at French asset manager Carmignac, warned that the market is “blind” to risks of default because much of corporate borrowing has happened through firms outside the banking system.

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