Businesses face gloomy outlook, says Bank of England

Some of Britain's biggest banks expect signs of corporate distress - including insolvencies - to increase, the Bank of England said today, as the economy struggles to emerge from the double-dip recession.

In a quarterly report on trends in lending in the UK, the Bank said while the major UK banks indicated that recent indicators of corporate distress were stable, the outlook was weaker.

The rate of corporate liquidations was unchanged in the year to March while the corporate write-off rate was also broadly unchanged, the Bank said.

Elsewhere, the report revealed that lending by all UK-resident banks and building societies to business fell by around £3 billion in the three months to May, while gross lending for house purchases was broadly unchanged.

PA