Bank lending to firms is expected to creep up at its weakest rate since 2015 next year, with experts blaming dampened appetite for business investment.
Growth in business lending will likely climb by 2.1 per cent in 2020, according to research out this morning by the EY ITEM Club.
The rise – which equates to £9.5bn – would mark the lowest growth in five years.
Citing continued uncertainty from Brexit and wider political events, the report suggests that many businesses are “holding off on their investment plans until they have a better understanding of where things stand”.
Demand for other forms of bank lending also continues to slow, with consumer credit projected to grow at its weakest rate since 2013.
Mortgage lending is set to grow by 3.7 per cent both this year and next, which despite improving in recent years, remains “well down on pre-financial crisis rates despite historically low interest rates and favourable mortgage lending terms”.
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“With households experiencing some levels of income growth, we’d normally expect to see stronger forecast figures,” said Omar Ali, EY’s UK financial services managing partner.
“Brexit, the global economic environment, and broader political uncertainty is resulting in many consumers and firms holding back on big spending plans,” he added.