LENDING to businesses dropped in May, according to banking industry data published by the Bank of England yesterday.
Equity fund-raising also dipped, as did commercial paper issuance.
Consumers were also hit – although credit rose slightly overall, mortgage approvals remained low and the overall market is sluggish.
Net business lending fell £1.7bn in May, reversing a £0.4bn rise in April and taking the quarterly fall to 2.9 per cent. On the year, lending is down 3.1 per cent.
Consumer credit edged up £0.7bn in the month, building on a £0.4bn rise in April, taking the annual net increase to 2.4 per cent.
Meanwhile mortgage approvals fell to 51,098 in May from a 25-month high of 58,572 in January.
“Housing market activity is persistently low compared to long-term norms and while it may eventually be lifted by more mortgages being granted at decent interest rates under the ‘funding for lending’ scheme announced by the Bank of England, this is unlikely to be a major factor in the near term,” said IHS Global Insight’s Howard Archer.