Businesses report shows improved access to credit
by Gill Montia
A recent survey of UK businesses shows that access to credit improved slightly during the first quarter of 2009, the first improvement in seven quarters.
According to the Deloitte CFO Survey, cuts in the Bank of England’s base rate, down to a record low 0.50%, plus government initiatives are beginning to impact on banking and credit systems.
In the poll of chief financial officers, 64% of respondents agreed that lower interest rates had cut the cost of existing borrowing and Deloitte’s vice chairman, Margaret Ewing, comments that while the survey is still “downbeat” the research does reveal “a marginally improved situation compared with the second half of 2008″.
Last week, the Bank of England reported that it expects to see a rise in commercial and personal lending during the second quarter of 2009, thanks to improvements in the cost and availability of funds.
In its Credit Conditions Survey, the Bank explained that it is not expecting the economic outlook “to be a factor bearing down on credit availability” in the months ahead.
The Bank also noted that corporate credit availability had increased slightly, with the trend expected to continue during the current quarter.
However, the financial institutions surveyed were also tightening their criteria for the corporate sector.
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