Accountancy group UHY Hacker Young released on Monday the results of a study that showed the weak status of lending in the UK when compared to those from other advanced economies.
Despite efforts from the British government to increase the amount of available credit, bank lending in the region still lags behind its peers in the Group of Seven, the organization consisting of the top economies in the world. Survey results revealed that the volume of credit in the UK’s private sector declined by 2.2% while that of other G7 members increased by 0.1% during the same period in 2013.
UHY Hack Young says that Britain’s new regulations that aim to prevent the reoccurrence of a financial crisis is partly responsible since they increased the amount of capital banks must hold and pushed up the costs of borrowing.
Together with the Bank of England, the government launched the Funding for Lending Scheme (FLS) in 2012 to make credit more available, but it has had minimal impact so far. Small and medium business in particular are still finding it difficult to access debt markets due to the expense as shown by the £2.7 billion drop in net lending from banks included in the FLS. The central bank shared last week that overall lending to non-financial companies in June decreased by £3.4 billion.
Laurence Sackers, Partner at UHY Hacker Young, says that “While things are slowly starting to improve in the UK, it is not enough to kick-start the growth in capital investment by businesses that we need to see.” Policymakers pointed towards banks needing to resume their lending services to help secure the region’s economic recovery.
The material has been provided by InstaForex Company – www.instaforex.com
Accountancy group UHY Hacker Young released on Monday the results of a study that showed the weak status of lending in the UK when compared to those from other advanced economies.
Despite efforts from the British government to increase the amount of available credit, bank lending in the region still lags behind its peers in the Group of Seven, the organization consisting of the top economies in the world. Survey results revealed that the volume of credit in the UK’s private sector declined by 2.2% while that of other G7 members increased by 0.1% during the same period in 2013.
UHY Hack Young says that Britain’s new regulations that aim to prevent the reoccurrence of a financial crisis is partly responsible since they increased the amount of capital banks must hold and pushed up the costs of borrowing.
Together with the Bank of England, the government launched the Funding for Lending Scheme (FLS) in 2012 to make credit more available, but it has had minimal impact so far. Small and medium business in particular are still finding it difficult to access debt markets due to the expense as shown by the £2.7 billion drop in net lending from banks included in the FLS. The central bank shared last week that overall lending to non-financial companies in June decreased by £3.4 billion.
Laurence Sackers, Partner at UHY Hacker Young, says that “While things are slowly starting to improve in the UK, it is not enough to kick-start the growth in capital investment by businesses that we need to see.” Policymakers pointed towards banks needing to resume their lending services to help secure the region’s economic recovery.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: