SME lending shows little if any growth

As the Bank of England begins a 2-day policy meeting, data collected has shown a slump in the construction industry as lending to British small businesses experiences little or no growth. This drop in construction puts Britain at the brink of a recession, considering that it was the main reason for the economic slump of the late 20011 and early 2012 period.

There has been a division within the ranks at the Central Bank on whether to adopt purchasing of government bonds, or to try other forms of raising funds. The obstacles ahead of the Monetary Policy committee are evident in the data collected by the data collected last Wednesday.

The weaker construction data, collected by the Market/Cips was attributed to the fact that the cold weather was affecting demand. Figures showing a change in purchasing managers, went from 46.8 to 47.2 in march, indicating a contraction in the sector within that month, but not as much as that experienced in February.

Howard Archer. The Chief Economist at IHS Global Insight reckons that the contraction in early 2013 was due to the rare expansion that occurred in late 2012. The service sector did a similar survey, whose results will be released on Thursday, showing clearly how the country avoided another recession in less than 5 years.

According to another survey by the bank of England, banks have more confidence lending money to potential home buyers, and large corporations, rather than lending to small businesses. This trend is expected to continue in the short-term future.