Lending to businesses falls again

Date: 21st December 2009

The number of loans lent to UK businesses of all sizes fell for the ninth month in succession in October, the Bank of England has reported.

According to the latest statistics from the central bank, the amount of money lent to British firms dropped by £4.6 billion when compared to the same month in 2008, equivalent to a 7.6 per cent drop.

Although the lack of credit was found to be easing, research carried out for the Bank's latest report also found that many businesses across the country are continuing to report "concerns over finance", with this likely to have wider economic implications over the longer-term.

The chief economist at the British Chambers of Commerce, David Kern, warned: "Dangers to the UK's productivity are reinforced by the new lending trends figures, which show that the flow of credit to business remained negative in October, with annual growth rates across all company sizes continuing to weaken."

Just recently, the BCC called on the Monetary Policy Committee to make encouraging banks to lend more to UK businesses one of its top priorities in the months ahead.