Adam S. Posen - Member of the Monetary Policy Committee, Bank of England
Banks across the UK are set to reduce their total lending figures for the first time in three years in 2012, new research has indicated.
According to a report published today (6 February) by the Ernst & Young ITEM Club, loans from British financiers are set to shrink by 2.2 per cent throughout the duration of this year.
This represents a reversal on the growth of 4.3 per cent witnessed in 2011 and is likely to result in an upturn in the popularity of payday loans, the study group indicated.
Neil Blake, senior economic adviser to the ITEM Club, attributed this trend to the negative impact of bank deleveraging.
"Households that fall outside of the credit terms of traditional lenders are increasingly looking toward other credit providers, regardless of the cost," he noted.
This comes after Bank of England policymaker Adam Posen told the BBC's Wake Up To Money podcast that financiers need to do more in terms of business lending.
By Asim Shah
