Business lending in January slumps at fastest annual rate since records begin

City A.M. Reporter
LENDING to businesses fell at its fastest annual rate in January since records began more than a decade ago, figures from the Bank of England (BoE) showed yesterday.

The flow of net lending fell £6.5bn in January, nearly twice as fast as in December, the BoE said in its Trends in Lending report.

That pushed the annual rate of decline to 9.3 per cent, the biggest fall since monthly records began in 1999.

Lenders reported that businesses were seeking to reduce debt levels and demand for credit remained subdued. They said there had been no significant change in loan availability over the month.

Mortgage approvals for house purchase made by Britain’s six biggest lenders – Santander, Barclays, HSBC, Lloyds Banking Group and Nationwide – fell for a third consecutive month in February to 48,000, down from 49,000 in January and the lowest since May 2009.

“In recent discussions, some major UK lenders reported that while those one-factors had receded, approvals and completions were still being affected to some extend given the lags involved,” the report said.

The BoE also said that M4 money supply rose 0.2 per cent month-on-month in February, unchanged from January’s revised growth. On an annual basis, M4 money supply increased 3.6 per cent in February