Jump to content
House Price Crash Forum
drrayjo

The Real Help Right Thing To Do - Not Really Helping

Recommended Posts

Lending to business weakest on record in July

LONDON (Reuters) - Net lending to British firms fell in July by the biggest amount since records began in 1998, the Bank of England said on Friday, a further sign policymakers' huge efforts to get credit flowing are not feeding through yet.

However, mortgage approvals by major lenders rose in August for the seventh consecutive month to 57,000 from 53,000 in July, the BoE's monthly Trends in Lending report showed.

The net flow of lending to businesses fell 15.5 billion pounds in July after a 3.6 billion pounds fall in June.

"Major UK lenders indicated that their stock of lending to businesses fell further in August," the BoE said, adding that the weakness in July was across all sectors of the economy.

On a year ago, lending to companies was down 3.3 percent in July and the BoE said the outstanding stock of loans to UK businesses by UK resident foreign lenders had contracted very sharply in recent months.

"That is consistent with reports from market contacts of an increased bias towards domestic lending among banks internationally," the BoE said.

The poor business lending figures are likely to worry policymakers given extensive and costly measures aimed at improving the flow of finance to recession-hit companies.

The BoE, which has slashed interest rates to a record low of 0.5 percent and started buying assets to boost activity this year, has said it will take some time for its 175 billion pound quantitative easing efforts to feed through.

Separately, the BoE published provisional figures for broad money supply growth -- an indicator back in vogue as a way to gauge if QE is working.

In August, M4 broad money supply grew just 0.1 percent after a 1.3 percent rise in July. On the year, M4 was 12.6 percent higher -- the weakest annual rate since September 2008.

This is not going well is it. Something big is working against QE.

http://uk.biz.yahoo.com/18092009/325/lendi...ecord-july.html

Share this post


Link to post
Share on other sites

Or perhaps businesses that could borrow, just don't want to? Those that actually want to borrow may not be a good risk and about to go bust?

Economists seem to have an odd view that every company wants a loan, and no company would refuse one. I run a business and I don't want a loan. Paying interest to borrow money is a cost, which should be avoided.

Loans are normally only required for healthy businesses to cover capital expenditure, or ocasionally cashflow. In this current manipulated, rigged market, how can any business make any sensible plans?

Edited by BalancedBear

Share this post


Link to post
Share on other sites
Or perhaps businesses that could borrow, just don't want to? Those that actually want to borrow may not be a good risk and about to go bust?

Economists seem to have an odd view that every company wants a loan, and no company would refuse one. I run a business and I don't want a loan. Paying interest to borrow money is a cost, which should be avoided.

Loans are normally only required for healthy businesses to cover capital expenditure, or ocasionally cashflow. In this current manipulated, rigged market, how can any business make any sensible plans?

Surely you have grand expansion plans that will bring your product into every home and destroy every one of your competitors? Borrow, borrow, borrow like there's no tomorrow! I'm afraid your lack of debt betrays a lack of ambition ;)

And "in this current manipulated, rigged market" how can anyONE make any sensible plans?!

Share this post


Link to post
Share on other sites
Or perhaps businesses that could borrow, just don't want to? Those that actually want to borrow may not be a good risk and about to go bust?

Economists seem to have an odd view that every company wants a loan, and no company would refuse one. I run a business and I don't want a loan. Paying interest to borrow money is a cost, which should be avoided.

Loans are normally only required for healthy businesses to cover capital expenditure, or ocasionally cashflow. In this current manipulated, rigged market, how can any business make any sensible plans?

They can't, they've not only got demand and the effects of the bubble to worry about they've also got the currency (being ******ed around by central bank QE and interest rate policy), massive tax uncertainties (QE is propping the most profligate, damaging ever in power) and any artificial business they may face as a result of other actions. An efficient, sensible business is being shoved into the pretend world of the economists and short term market manipulators, very dangerous time to make any long term commitment.

Share this post


Link to post
Share on other sites
Surely you have grand expansion plans that will bring your product into every home and destroy every one of your competitors? Borrow, borrow, borrow like there's no tomorrow! I'm afraid your lack of debt betrays a lack of ambition ;)

Even if I and others did, how can any of us make plans when there may be yet other government intervention around the corner.

A friend of mine runs a small garage fixing cars. At first he thought the recession may help, as people would fix cars rather than buying a new one. The scrappage scheme has now meant he has less business. Good job he did not expand!

Share this post


Link to post
Share on other sites
They can't, they've not only got demand and the effects of the bubble to worry about they've also got the currency (being ******ed around by central bank QE and interest rate policy), massive tax uncertainties (QE is propping the most profligate, damaging ever in power) and any artificial business they may face as a result of other actions. An efficient, sensible business is being shoved into the pretend world of the economists and short term market manipulators, very dangerous time to make any long term commitment.

Spot on.

Share this post


Link to post
Share on other sites
Even if I and others did, how can any of us make plans when there may be yet other government intervention around the corner.

A friend of mine runs a small garage fixing cars. At first he thought the recession may help, as people would fix cars rather than buying a new one. The scrappage scheme has now meant he has less business. Good job he did not expand!

Great example! The manipulation of the market just takes from one to give to another. Who has the right to make that call? Are they fallible? Rhetorical to most, I hope, but 'no one' and 'yes' are the answers.

I run a small business and things were down last year, now they are up and I'm certain they will be down again next year. Last year, I barely had enough work to pay the bills, the start of this year I started contracting to supplement, by the middle of this year I had to subcontract more (including work I would have otherwise done) as I had too much. In such shifting sands, how can anyone make sturdy plans?

With such systemic problems in our debt saturated monetary system, how can anyone believe that everything is now fixed? I am surprised daily that the whole thing hasn't tumbled into disarray, but I just can't see how the day of reckoning can be delayed for much longer. :blink:

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   296 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.