Total new lending fell to £3.7bn last month from £4.6bn in January, the Bank of England said yesterday, but the annual rate of growth has accelerated to its highest in three years. An analysis of lending by members of the British Bankers' Association suggests that manufacturers have returned to borrowing after paying off debt for more than three years.
The BBA reported new loans of £2.9bn in February, with a fall in mortgage lending but rises in other categories. Borrowing by the financial sector rose sharply.
Manufacturers borrowed £108m, the second monthly increase in a row withtobacco and transport equipment seeing the sharpest rise in recent months.
David Miles, a Merrill Lynch economist, said: ``It would be amazing and depressing if companies did not substantially increase their spending on investment this year.''
Additional figures released by the Bank of England showed that M4, the broad definition of the money supply, rose by 0.6 per cent last month compared with 0.3 per cent in January. Year-on-year, it picked up to 4.6 per cent, still safely in the lower half of the Government's 3-9 per cent monitoring range.Reuse content