Lending to manufacturers grows by 8.4%

UK Finance has published its latest business finance update for December 2018 which reveals that lending to manufacturers grew by 8.4 percent in the year to December 2018, in contrast to a 0.3 percent contraction in overall UK business borrowing. There was also annual growth in borrowing by the transport and accommodation and food service sectors.

Deposits held by UK non-financial companies grew by 3.5 per cent in the year to December 2018, with higher annual growth in the wholesale and retail, transport, electricity, and gas and water sectors.

Commenting on the data, Stephen Pegge, Managing Director, Commercial Finance at UK Finance said “Lending to manufacturing has seen strong growth during 2018, compared with a subdued appetite for borrowing by most other sectors. This may in part be driven by manufacturing businesses stockbuilding in the face of ongoing economic uncertainty.”

“The year-end has also seen a renewed increase in business deposits, particularly within the construction and retail sectors, suggesting firms are preparing for uncertain trading conditions by building up their cash reserves.”