Lending slow despite money boost
The billions being created by the Bank of England to boost the money supply are taking time to filter through to the economy, official figures have signalled.
The Bank of England's figures on the money supply for March - the first month of its historic £75 billion quantitative easing programme - showed a slowdown in lending to households and private companies.
Growth in M4 lending - such as loans and overdrafts - to households was flat at 0.2% month-on-month, but the annual rate of growth eased to 3.8%.
And the annual rate of growth in lending to businesses fell to 0.2% in March compared with the previous month, while year-on-year M4 lending growth was down at 3.2%.
Households' bank and building society deposits and cash rose by £3.3 billion in March but year-on-year growth in the broad money indicator fell to 3.7%.
The cash and deposits of private non-bank companies fell £4.1 billion in March - albeit after a strong rise in February - but is 2.1% lower year-on-year as firms are forced to eat into reserves in recession.
The figures come amid conflicting signals over the availability of corporate credit.
MPs on the Treasury Select Committee have attacked some banks for cutting back loans or hiking charges for small businesses while taking billions in public support.
But the British Bankers' Association said the stock of lending to small businesses was around 5% higher than a year ago in March and had now risen in each of the first three months of 2009.
IHS Global Insight economist Howard Archer said the Bank of England data was "disappointing".
