/24-7PressRelease/ - LONDON, UK, January 07, 2008 - According to a quarterly survey from the Bank of England, the consumers are now finding it hard to borrow money. The survey shows that banks reduced lending money to UK households in the last quarter of 2007 as a result of the credit crunch in the financial markets.
The Bank of England is expecting the same situation to continue this year as the banks are still reluctant to lend money amid high borrowing costs and reduced availability of credit. The quarterly Credit Conditions Survey from the Bank of England reveals that lending to business customers has also fallen sharply. The Central bank said that both secured and unsecured loans to households have fallen 'due to lenders reducing their risk appetite'.
The findings of the survey indicate that both consumer spending and business investment are likely to suffer, adversely hitting the UK economic growth. This might soon pave a way for further reduction in the interest rate by the Bank of England.
The Bank of England reduced its interest rate in the beginning of December 2007. It was the first time since August 2005 when the Bank had reduced its base rate of interest from 5.75% to 5.5%.
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