Is UK bank lending reflecting the UK economy?
There has been much talk and much criticism of the UK banking industry with regards to "lacklustre" lending levels to small and medium-size businesses. However, in many ways the lending patterns of UK banks are currently reflecting the very difficult UK economic environment at the moment with the potential for further problems in the future. So are the banks right to hold back on further lending?
This is a very difficult situation because on one hand the UK government has been asking UK banks to reduce their risk while on the other they have been pushing for further investment in the UK small business and medium business arena. In many ways these two suggestions are very much at the opposite ends of the spectrum and many UK banks have fallen somewhere in between the two.
One major problem is the fact that £50 billion was invested directly into the UK banking industry to prop it up and ensure there was no collapse, something which the UK population has not forgotten. So while many in the UK struggle to make ends meet it would appear, at least on the surface, that the UK banking arena is back to the boom times with large bonuses and large profits. But how long can this last against a backdrop of a very difficult and challenging economic environment?
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