LONDON Jan 13 A post-Brexit vote slump in
demand for bank lending among small and medium-sized British
firms continued into the last three months of 2016 and banks
expect small companies will remain reluctant to borrow in early
2017, the Bank of England said.
But demand for bank borrowing by large companies was
unchanged in the three months to mid-December, stabilising after
a significant fall in the third quarter, the BoE's quarterly
Credit Conditions Survey showed.
"Significant reductions in capital investment and commercial
real estate were reported to be the main factors contributing to
changes in corporate lending demand in Q4, while merger and
acquisitions activity has pushed up on demand," the Bank said.
The BoE has been watching for signs that uncertainty about
Britain's planned departure from the European Union will hurt
business investment and weigh on overall economic growth.
The BoE also said the availability of mortgage lending was
flat in late 2016, although demand for buy-to-let borrowing rose
significantly despite tax changes introduced in April which were
partly designed to cool the market.
The Bank said overall mortgage availability was expected to
increase slightly over the three months to mid-March.
Unsecured credit increased slightly in late 2015 and was
expected to decrease in early 2017, the survey showed.
Top BoE officials said this week they were keeping a close
eye on strong growth in consumer borrowing which has drawn some
comparisons with previous unsustainable increases in household
(Reporting by William Schomberg, editing by David Milliken)