Business borrowing

£3.6bn increase in business borrowing in March

Borrowing by non-financial companies rose by £3.6bn in March.

Figures published by the British Bankers’ Association (BBA) attributed the growth in part to short-term borrowing within the public admin sector, which is likely to unwind next month.

The annual growth rate of 3.5% in March was higher than in recent months, with expansion in lending to the construction, manufacturing and wholesale and retail sectors.

Commenting on the figures, Rishi Khosla, CEO and co-founder of OakNorth Bank, said: “The best entrepreneurs can build in any environment, even ones that are as uncertain as ours has been since the referendum vote.

“We’ve definitely seen this and have had a great pool of strong entrepreneurs coming to us for loans to scale their business despite the ongoing uncertainty.”

Elsewhere, mortgage approvals for house purchase were 2.8% lower than in February 2017, but in line with the monthly average of 41,600 over the past six months.

Remortgaging approvals rose 2% higher than in March last year, but were lower than in recent months.

Meanwhile, consumer credit growth dropped by 0.4% to 6.1%.

Eric Leenders, managing director for retail banking at BBA, added: “In March, annual growth in consumer borrowing from the main high street banks slowed, perhaps mirroring the dip seen in retail sales volumes as price rises appear to have started biting into consumers’ spending.”

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