April 2, 2009

British lenders say credit growth possible

British financial firms indicated in a recent survey that more lending would be made available to borrowers in the near-term, the Bank of England said.

Nearly 15 percent of lenders responding to a bank survey indicated they would increase lending to households and 26 percent indicated they would increase lending to businesses during the next three months, the bank said.

The recent survey was the first indication that lending would increase since September 2007, The Daily Telegraph reported Thursday.

At best, this shows that things aren't getting worse. It doesn't mean this will translate into actual lending though and there is no way of knowing from the survey how much lenders (will) increase the supply of credit, Vicky Redwood, an economist at Capital Economics told the newspaper.

Even if the supply of credit does increase significantly, there is no guarantee that demand will rise to meet it, but this does show that attitudes are getting better, she said.