Economic recovery depends partly on continued lending
July 3, 2009 by admin
Filed under News, News-Loans
The deputy governor of the Bank of England, Paul Tucker, has recently spoken out about the future of the UK’s economy, and has stated that in his opinion the future of the economy partly depends on continued credit being extended by lenders.
Tucker said that it was vital that lenders keep extending credit to consumers and businesses in order to aid economic recovery. He was speaking recently giving a speech to the Association of British Insurers.
Like the governor of the Bank of England, Mervyn King, and various industry groups such as the Confederation of British Industry, Mr Tucker said that it was important not to get too optimistic about a fast recovery for the economy, despite various reports that have been released recently claiming that the UK could soon see and end to the recession.
He said that part of the course of getting the nation out of recession was to ensure that credit was still made available.
With the effects of the global credit crunch still impacting on lenders, and the extra caution that many lenders are exercising, the availability of finance has all but dried up for many businesses and consumers.
However, Tucker said that this was bad news for the economy, and that financial institutions needed to start lending again to help speed up the recovery.
He stated: “For the moment it is unclear – as, I must say, it is bound to be at this stage – whether the financial system can generate the expansion of credit that will most likely be necessary to support [economic] recovery. Not lending would be a counterproductive business and financial strategy.”
