Borrowing is becoming easier, says Bank of England
Businesses and homeowners are finding it easier to get access to credit, fuelling hopes of an economic recovery next year.
A Bank of England survey showed that lenders have reported increased availability of loans for corporate customers over the past quarter.
However, the increase was lower than expected and weaker than the prior month and suggests smaller firms are still struggling to borrow money. For the first time since the second quarter of 2007, there has been a rise in credit availability for commercial property firms.
This signals a belief that the slump in office values has bottomed out.
Homeowners are also finding it easier to borrow, thanks to improvements in the economic outlook. But unsecured personal loans remain in short supply, the survey showed.
Demand for credit cards and personal loans remains weak, as consumers try to pay back their debts. But lenders expect to see increased demand in the aftermath of the Christmas shopping season.
Corporate defaults are still rising and are expected to continue to rise. But mortgage arrears are stable and defaults on personal loans are down.
Owen James, economist at the Centre for Economics and Business Research, said the 'results suggest that credit availability is improving which is encouraging and supports our view of a return to growth for the UK in the fourth quarter.'
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