UK credit market shows signs of revival, says industry body
11 Aug 2009
The credit crunch in the UK is easing as companies now find it easier to access loans, according to the Confederation of British Industry (CBI).
A recent survey by the industry body found that a net 18 per cent of 73 firms are reporting improved credit availability in the past three months against a net 20 per cent reporting a deterioration in May. The body questioned companies from 15 to 24 July.
The Bank of England last week said it would boost the money supply in the economy by an additional £50 billion to stimulate credit growth and hoist the economy out of the recession. However, according to governor Mervyn King, the need for banks to repair their balance sheets is likely to restrict lending.
The survey also shows that though credit may be easier to get, the cost of finance has continued to rise and availability of trade credit insurance has slumped.
The survey says that of the companies that sought new credit lines in the past three months, 27 per cent reported better availability while 10 per cent said it has worsened.
Large companies having more than 5,000 employees reported strong improvement in new credit availability over the last three months as compared with the difficult access at the start of the year.
