‘Little sign’ of business lending improving

companies have seen few signs that the flow of lending to businesses from banks has improved in recent months, a report showed yesterday.

A study by the Engineering Employers Federation (EEF) revealed that lending conditions have started to stabilise, but the overall picture remained “mixed”.

The survey of almost 300 firms showed that concerns still remained despite a gradual improvement in the availability of finance.

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Fees on existing lending showed little improvement, with more companies reporting an increase on rates, said the EEF.

Chief economist Lee Hopley said: “The improvement in availability last quarter has now been accompanied by some easing in the numbers of firms facing a rise in the cost of finance. While conditions are slowly heading in the right direction, the overall picture remains far from being as supportive as we’d like.

“There is clearly more finance available but the fact more companies are still reporting an increase in cost rather than a decrease suggests that firms are paying a price for it.

“With global clouds of uncertainty providing enough reasons for firms to hold off investment, this is the time we can least afford to add any further constraints through tight conditions on accessing finance.”

The EEF represents the interests of the UK’s manufacturing sec-tor.

As well as lobbying the Government, it provides services to members.

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