Bank of England’s latest Money and Credit statistics reveal that growth in SME borrowing fell to 0.8% during December.
Comparing month-on-month Bank of England SME lending data, growth in business lending in November was at 1%, falling to 0.8% in December 2019. Comparing year-on-year data, business lending to SMEs has risen in the last 12 months, increasing from -0.1% in December 2018.
While business borrowing fell month-on-month, Virgin Money revealed that during the last three months of 2019 its business lending increased, while Shawbrook Bank has revealed to Moneyfacts.co.uk that its business lending grew in December. Talking to Moneyfacts.co.uk, a spokesperson from Shawbrook Bank said: “In the lead-up to the election it was evident the demand for borrowing during both November and early December was suppressed, as businesses wanted political stability before making investment decisions. Once the election result was known, we have encountered a pickup in demand that led to an upsurge in business being written in the second half of December and this trend has continued into January.”
Despite this month-on-month fall in business lending, last week we reported that Virgin Money’s trading update report showed that its lending to businesses had increased in the last three months of 2019. In the report, Virgin Money stated that it had achieved its aim of lending £6bn to SMEs over a year period. Commenting on this commitment, David Duffy, CEO at Virgin Money UK PLC, said: “We have also now delivered on our commitment to lend £6bn to SMEs over the three years to the end of 2019, with £6.5bn lent in total. This included lending of £1.3bn in Scotland, £0.9bn in Yorkshire, £0.9bn in the North West and £0.5bn in the Midlands, demonstrating our support for SMEs across the regions of the UK.”
The Bank of England report also revealed that UK businesses, which includes large businesses and SMEs, repaid £0.5bn of bank loans during the month, compared to an average net borrowing of £1.1bn over the previous six months.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
