Banks need to be forced to lend

Some industry officials have said that the government needs to step in and start forcing banks to lend money to consumers and businesses again, after revelations that lending levels are unlikely to improve in the near future. A recent report claimed that higher lending levels were unlikely in the imminent future, which means that the economy could continue to suffer.

According to the Council of Mortgage Lenders there was a drop of 8 percent in mortgage lending levels between December and January, which equated to over £12 billion. The CML said that activity within the mortgage sector may have improved slightly but was still very bleak compared to last year.

The CML said: “Mortgage lending activity continues to be very weak and while people are searching eagerly for some signs of recovery, it would be unrealistic to expect a meaningful revival in lending in coming months.” A mortgage broker added: “The January lending figures are a joke. Enough is enough. It is time for the government to get the gloves off and force the banks to lend.”

The government has been looking at various ways to try and increase lending by banks, and more recently has been looking at quantative easing to try and boost the economy and improve lending levels to consumers and businesses.