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U.K. Business Lending Forecast to Shrink Until 2019, EY Says

  • Financial services outlook hurt by post-Brexit vote economy
  • Stock of company loans seen falling to lowest since 2005
No. 1 Canada Square, center, stands surrounded by the offices of global financial institutions, including HSBC Holdings Plc, Citigroup Inc., and JPMorgan Chase & Co. in the business and shopping district of Canary Wharf at dusk, in London, U.K., on Friday, Jan. 15, 2016. Growing peer-to-peer lending and online money transfer services helped raise a record $3.6 billion in venture capital funding for the U.K.'s technology sector last year, according to data compiled by London & Partners.
Photographer: Chris Ratcliffe/Bloomberg

Business loans in the U.K. will shrink to the lowest in more than a decade in the next couple of years as weaker economic prospects in the aftermath of the vote to leave the European Union damp demand, according to the EY ITEM Club.

Total lending to companies will contract 1.8 percent next year and another 1 percent in 2018 before finally recovering the following year, the organization said in a report released on Monday. By then, the total stock of business loans will have dropped to 376 billion pounds ($497 billion), the lowest since 2005, EY said.