UK Finance

UK business borrowing contracts by 1.9%

Borrowing by UK businesses from high street banks contracted by 1.9% over the last 12 months, according to the latest figures.

The business finance update for October 2018 from UK Finance revealed that borrowing had decreased to £263bn.

However, deposits in high street business accounts increased by 3.4% over the same period to £379.1bn.

Lending to the mining and quarrying industry grew by 18.8% to £1.2bn, while in manufacturing it increased by 6.9% to £18.2bn.

By contrast, lending to the education sector decreased by 5.6% to £7.6bn, while in construction it fell by 3.7% to £19.9bn.

Stephen Pegge, managing director of commercial finance at UK Finance, said: “Appetite for finance among business remains subdued with overall borrowing down slightly from the same period last year.

“However, lending to the manufacturing, agriculture and accommodation sectors has increased.

“Business deposits also continue to grow, which suggests firms are stockpiling cash in the face of an uncertain economic climate.”

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