In contrast to a negative outflow during the previous period, net lending to UK businesses took a positive tack this past May. The annual rate of growth in the stock of lending to SME’s and large businesses remained negative though. This is from the Bank of England “Trends in Lending” report published in July. The report covers data up to May 2014 with “intelligence” up to June. The report also noted that credit conditions remained tight for the smallest businesses.
Mortgage approvals by all UK lenders for house purchase fell according to the BOE. The average monthly net lending flow by UK-resident mortgage lenders in the three months to May was £1.8 billion, slightly higher than the previous three months.
Commenting on today’s Bank of England Trends in Lending report, Anil Kapoor, director at BDO LLP, said:
“Despite Government rhetoric and pressure, banks failing to meet demand for business lending has become a lasting trend. So while today’s figures reveal a slight uptick in bank lending, there is clearly more demand from business than is being serviced, and they are sorely in need of financing to sustain current demand and achieve growth.
“As a result, it is likely that the already successful alternative lending market will continue to develop and expand. With alternative lending solutions cementing their place as a legitimate solution for businesses, and bank lending continuing to fall short of expectations, the industry must look to the future to ensure they can guarantee sustainability and are able to meet long term demand from businesses.”
The Bank of England report is embedded below.
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