Economics
Credit Starvation Could Whack Britain
In a new report, the Bank of England warns that a growing number of firms may go broke because they can't get a loan
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The prospect of large numbers of British companies failing after finding themselves starved of credit is moving closer, the Bank of England warned yesterday. Its latest Credit Conditions Survey, the best indicator of how banks and other financial institutions are behaving, revealed that there has been a sharp reduction in the availability of credit to companies over the past three months and that the decline is set to continue.
"Lenders reported that they had reduced overall corporate credit availability to mid-September and credit availability was tightened by more than had been expected in the second-quarter survey," the Bank said. "A further reduction in overall credit availability was expected over the next three months."