"Net lending to businesses grew by 6.9% in 2025, but is predicted to fall to around 3.5% in 2026, signaling a potential shift in borrowing demand influenced by global economic pressures and weaker investment confidence, which investors should monitor closely. Analysts say the slowdown reflects a more cautious business environment driven by geopolitical uncertainty, potential trade disruption, and tighter fiscal conditions, which are key factors for policymakers and investors to consider in their strategic planning."
"Last year's lending growth was supported by falling interest rates, which encouraged borrowing and helped push business lending to its highest level since the pandemic. However, the outlook for 2026 is more subdued. Firms are expected to scale back expansion plans and delay capital investment amid unpredictable trading conditions. Despite the short-term slowdown, forecasts suggest borrowing activity will recover if economic conditions improve as expected over the medium term, which should reassure stakeholders about the resilience of the UK economy."
Net lending to UK businesses rose 6.9% in 2025 but is forecast to decline to around 3.5% in 2026 as borrowing demand weakens. The slowdown is linked to geopolitical uncertainty, potential trade disruption, tighter fiscal conditions and reduced investment confidence. Falling interest rates supported the prior surge, but firms are expected to delay expansion and capital spending amid unpredictable trading conditions. Total bank lending is also projected to decelerate, with growth easing from 4.1% in 2025 to 3.1% in 2026. Lending is projected to rebound to 4.5% in 2027 and 4.9% in 2028 as confidence and macro stability improve.
Read at London Business News | Londonlovesbusiness.com
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