The Bank of Scotland, now part of HBOS, has announced the recruitment of two new members to the banks commercial team. The instructions for the new members are to increase and enhance the company's exposure to the small and medium enterprise market in Scotland which has recently been starved of finance causing many potentially "good" companies to fall by the wayside.
The Bank of England has confirmed that the special liquidity scheme which has seen £185 billion made available to the UK banking system will not be extended beyond January 2012 when it was originally due to expire. This is a bitter blow to the UK banking community as the Bank of England introduced this particular crutch to combat the credit crunch and resulting downturn but believes now is the time for the industry to stand on its own two feet.
If there is one thing becoming more and more apparent with regards to the UK economy it is the inability of UK banks to turn on the liquidity tap. We have seen mortgage approvals fall dramatically, mortgage deposits rise, the net repayment of debts and indeed many believe that the criteria for mortgage approvals could be tightened over the next six months. Against this backdrop it is nigh on impossible for the UK economy to push ahead in the short to medium-term and the UK government and Bank of England will need to turn the screw.
A number of debt management companies in the UK are this week fighting for their future after the OFT issued 129 formal warnings to companies operating in sector. The OFT undertook a "website sweep" posing as a mystery shopper only to find that some of the advice and information given to potential customers was well below the standards expected.
While there is no doubt that friction between the UK banking sector and UK businesses continues to grow, a group of three local businessmen literally took the matter into their own hands this weekend. It was reported that angry campaigners bricked up the front door of a Barclays Bank branch in Bournemouth attracting massive support from passing motorists and pedestrians.
Bank of England data for the month of June has confirmed what could amount to a very difficult situation for the UK economy in the weeks and months ahead. A total of £285 billion of taxpayer funding was used to finance the credit offered to households and businesses across the UK. However, this is just a small fraction of the funding made available by the Bank of England and the UK government to support the economy which will need to be paid back over the next 18 months.
The Irish authorities are today breathing a sigh of relief with news that the €1.5 billion bond auction has gone relatively well. There was enough demand to fulfil the total €1.5 billion auction and indeed in the secondary market there has been a reduction in the yield demanded by investors which effectively reflects the growing confidence that perhaps the Irish economy may not need an international bailout.
Recent figures from the Bank of England show that not only are mortgages out of the reach of many people in the UK but loans to small businesses are now worse than they were six months old. Indeed, mortgage loans are at a 10 year low which does not bode well for the UK property sector which is already currently struggling to survive.
A report by the Bank of England has confirmed what many in the business arena already knew with net lending to businesses contracting by £2.5 billion in July following a £3.2 billion reduction in June. This has resulted in the slowest annual rate of increase for almost a year and when you also take into account the fact that the Bank of England's M4 money supply figure fell by 0.2% in August, leaving the annual rate at just 1.8% (the weakest since records began in 1983) it is easy to see why UK businesses are struggling.
The Bank of England has today criticised UK lenders citing the fact that many interest-rate cost savings have not been passed on to customers. Even though interbank borrowing rates have fallen nowhere near the same amount as UK base rates the Bank of England still believes that the vast majority of savings have not been passed on to UK businesses and UK households. Indeed there is even a suspicion that banks are expanding their profits by increasing the rates they charge customers.
