Rate rise ‘will hit corporate returns’

By The Newsroom

Published 31st Dec 2015, 05:00 BST

Updated 31st Dec 2015, 06:00 BST

Bank of England governor Mark Carney Photo: Anthony Devlin/PA Wire

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 it 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.