BBA figures suggest businesses have little appetite for loans
The latest UK bank lending data from the British Bankers' Association provides little evidence that the government's 'funding for lending' scheme is driving more companies to borrow money to invest in the business.
The BBA figures showed that non-financial businesses had repaid a net £0.2bn of their bank debts in January – far lower than the £3.1bn paid back in December, and below the average of £1.4bn seen in the six months leading up to December – there was little appetite for borrowing.
Analyst and chief economist at Markit Chris Williamson, said the scheme, designed to encourage the banks to increase their lending, was seen as a key element of the government's economic growth initiative.
"The very fact that businesses are more comfortable reducing their debt than having the appetite to borrow more is a further indication of either how weak business confidence is at the moment, or how banks are still failing to offer businesses loans with acceptable terms and conditions," Williamson concluded.
