Business lending is predicted to shrink by around 1% this year, 1.8% next year and a further 1% in 2018, according to the EY Item Club’s latest report on financial services. Lending had been expected to rise this year and beyond, after a steady decline since the financial crisis. Bank lending to businesses is set to fall in the aftermath of the Brexit vote, while demand for consumer credit and mortgages will also weaken as people spend less on big-ticket items, a report predicts. Mortgage lending and consumer credit are still expected to grow, but at a slower pace than previously thought. Omar Ali, UK financial services managing partner at EY, said: “We had hoped 2016 would be the year that total lending recovered to pre-crisis levels, but with the revised economic outlook this looks increasingly unlikely.

Source: The Guardian July 31, 2016 23:01 UTC