According to the bank of England the lending in cash starved business has risen a bit but not as fast as anticipated, during the past few months.
Recently a survey was conducted to check the credit flow to the businesses or to know about the availability of credit to the business establishment, after going through the survey it can be established that the credit flow is showing an upward trend but not the way as it was expected to move.
This report has dampened the hope of an early recovery it should be noted that the expectations are so high because of the survey conducted in April which showed that the recovery is going in a good pace
All leading lenders are saying that they will increase the loans to households and firms in the coming few months because the funding is available at a very cheap rate as was pledged by part-nationalized Lloyds Banking Group and Royal Bank of Scotland.
But there is more worrying news that the margin on corporate and household lending is rising during the stated period hence they are adversely effecting the overall situation and the worse thing is that this trend is going to continue for few more months
The bank has also highlighted that a small change in lending policy by lenders has increased the availability of secured loans like mortgages to house owners since the month of March
And the good news is that the lenders are expecting that the availability of credit will rise further in the coming months supported by higher risk appetite.
The report has also stated that the economy will have less adverse impact due to availability of credit over the next few months.