Stagnation Charts #4: trends in lending

19 Apr 2013, by Richard Exell in Economics

The latest Stagnation Chart comes from the Bank of England’s monthly Trends in Lending report, which covers lending by all the UK’s financial institutions. The stock of lending to businesses fell by about £4.8 billion in Dec – Feb, but what’s more worrying is the fact that the recovery in business lending fell away. Indeed, lending is still in decline:

In a recovery you would expect lending to businesses to grow as they scale up to meet growing demand. I’ve followed the Bank in separating out the real estate sector, which accounts for 40 per cent of business loans, don’t confuse this with mortgage lending, but that follows a similar pattern:

This is what stagnation looks like.