Business credit: Still cramped

Posted: December 6, 2013 in economy
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UK Only Article: 
UK article only


The rise of BlackRock

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Business credit


Credit must be eased if Britain’s economic recovery is to continue

BRITAIN is becoming bouncy and, in places, bubbly. A pumped-up housing market and cheap mortgages have sent households on a shopping spree; many are raiding savings and taking on new credit-card debt. George Osborne, the chancellor of the exchequer, was set to deliver an unusually perky autumn statement as The Economist went to press. But a big problem persists. Six years on from the financial crisis, British firms are still struggling to raise money. That could slow the economic recovery, or even wreck it.
Considering the huge scale of British finance, lending to firms is modest. Excluding the loans that banks make to each other, total business lending was around £450 billion ($720 billion) in October, according to the Bank of England. It is a just a third of the £1.4 trillion—in mortgages, personal loans and credit cards—that Britons owe, and less than a tenth of British banks’ £7 trillion …

via Economic Crisis


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