Lenders to ease credit as economy starts to improve

Lenders expect to make credit more easily available to households and businesses in the first quarter of 2010, a survey by the Bank of England has revealed.

The Bank's quarterly credit conditions survey also showed that lenders expect to narrow spreads on both corporate and mortgage lending.

"Credit availability was expected to improve further in the first quarter of 2010 for corporates and for secured lending to households and to stabilise for household unsecured credit," the survey said.

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"Spreads in general were expected to narrow over the next three months," it added.

Spreads have widened dramatically, reflecting a surge in borrowing costs for banks and a reluctance to lend.

An improving economic outlook was cited as the main reason for the easing of credit.

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