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Business lending still in a trough

Lending to both large and small firms remains weak, the Bank of England has said.

Reporting on the willingness and ability of the banks to lend to businesses, the Bank of England found that the supply of credit failed to pick up during April.

The cost of business borrowing, however, increased, with spreads – the level of interest charged above the official base rate – and fees on the rise.

Figures from the main UK banks indicated that the value of gross new corporate loan facilities slipped back last month following an improvement in March.

To compound the problem, the Bank revealed those new loan facilities that had been made available were counterbalanced by cuts in loans elsewhere.

Firms wishing to borrow money had also encountered significant increases in the fees charged on the renewal of existing loans and credit facilities.