The Confederation of British Industry (CBI) has revealed that business lending fell to 3.1 per cent in the year to May – a marginal improvement on the 3.5 per cent from the year to April.
Lending growth in general was subdued in the UK, with net mortgage lending falling from £1 billion in April to £0.6 billion in May. Year-on-year growth remained at 0.8 per cent for a sixth consecutive month.
In other news, the UK Monetary Policy Committee has voted to expand quantitative easing (QE) by a further £50 billion.
In its weekly update for the week ending 6 July, CBI said that a QE expansion was imminent following a faster than expected fall in inflation and an apparent slowing in global economic momentum.
CBI also reported that the European Central Bank cut its main interest for the first time since last December, to a record low of 0.75 per cent, in a widely expected move.
New measures to tackle the crisis in the Eurozone were announced following last week’s EU summit, meaning that the monetary union’s main bailout funds, the EFSF and ESM, will be allowed to intervene directly in Eurozone banks.
Uncertainty over Greece’s election outcome meant that the country suffered an increase in deposit flight, with the year-on-year fall in deposits moving from 16.3 per cent in April to 18.8 per cent in May.