Bank Funding Hits Six Year Low

A report by the Ernst & Young Item Club has suggested that despite the Government’s efforts to encourage lending, bank lending to businesses will hit its lowest level this year since 2006.

An Ernst and Young study says that corporate lending will fall by 4.6% to £429bn at the end of 2012, which will be the fourth consecutive decline to its lowest level since 2006.

The report also predicts that although some growth is forecast to resume from 2013 corporate loans will not recover to 2008 levels until 2016.

Recently, HMG have announced a business bank to be unveiled in an attempt to boost lending.  Banks and businesses, however, differ on the current position. Banks state that demand for loans is low; businesses retort that banks are unwilling to lend.

Sc: Workplace Law MGBA; UKBA; Ernst and Young


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