Lending continues to fall in the UK

Lending to businesses outside of the UK financial arena continued to fall last month with figures from the British Bankers Association confirming a reduction in credit of £2.4 billion. While financial services and financial investment companies continue to attract the support of their bankers it seems that non-financial related companies in the UK are struggling.

The £2.4 billion reduction in July lending is higher-than-expected and higher than the average for the previous six months. This is a major concern for UK businesses at a time when the economy is under pressure, talk of a double dip recession has resurfaced and UK businesses need all of the financial assistance they can get. The situation in the UK mortgage market is also beginning to cause concern.

The number of new home purchases also fell from 34,575 in June to 33,698 in July which to be honest was fairly in line with expectations. However, it is the expectation that this trend in both the UK housing market and the UK business arena will continue in the short to medium term which is more of a worry. Without additional finance for both markets it is neigh on impossible for the UK economy to move forward, stabilise and eventually return to the boom times.