As UK Avoids Recession, Lending From Banks Will Rise

EY says that lending will go up by £29 billion in 2023.

New predictions say that lending will go up this year because the UK economy managed to avoid a slump.

According to the EY ITEM Club UK Bank Lending Forecast, the total amount of bank loans in the UK is expected to go up by 1.2% in 2023, which is a net increase of £29 billion. This is better than the 0.1% drop that was projected in February.

A drop in inflation, lower-than-expected energy bills, and a strong job market mean that the UK’s GDP is expected to grow by 0.2% instead of shrinking in 2023. This could lead to more borrowing by both consumers and businesses.

Anna Anthony, UK financial services managing partner at EY, said that the UK is “still on the path to economic recovery,” but that we are “in a more optimistic place than we were a few months ago.”

“The recession that many thought was inevitable is now likely to be avoided and energy prices have fallen, boosting consumer and business sentiment,” she said.

“Despite recent volatility in the global banking sector, the EY ITEM Club has been able to upgrade its growth forecasts for UK bank lending this year, which is positive news.”

Net mortgage lending is also expected to grow by 1.2% this year, which is more than the 0.4% expected in February.

This year, both mortgage lending and total loans are expected to grow. Experts in the field have suggested that the industry as a whole think about how to use the extra money from outside sources, whether to improve and modernise areas like farmland and farming or to train their workers better.

“With the UK’s improved economic set to see bank lending surging, companies have a new opportunity to invest, grow and develop more sustainable business models,” HeavyFinance founder Laimonas Noreika said.

“As the global race to increase low-carbon green investment continues, UK firms need to think again about the steps they can take to reduce C02 emissions.”