Bank lending to UK non-financial businesses dropped to 59% of GDP in the third quarter of 2025, the lowest ratio in nearly three decades.
The decline reflects tighter credit conditions and cautious borrowing among corporate borrowers.
Analysts said reduced lending could constrain investment just as firms face higher operating costs.
Small businesses reported particular difficulty securing affordable term loans from major banks.
Regulators are tracking whether the trend represents cyclical caution or structural shrinkage in business credit.
The data point arrives amid broader concerns about UK productivity and capital formation.
A 59% ratio indicates corporate debt levels relative to national output have fallen to levels not seen since the mid-1990s benchmark period cited by researchers.
Economists debate whether the drop signals healthy deleveraging or insufficient access to growth financing.
UK bank lending to non-financial businesses fell to 59% of GDP in Q3 2025, the lowest share in nearly 30 years.
Corporate credit relative to output has retreated to levels not seen since the mid-1990s comparison window.
Non-financial business lending fell to 59% of GDP in Q3 2025, a near 30-year low.
Tighter bank credit may limit business investment during a period of rising input costs.
Regulators are studying whether the lending drop reflects caution or constrained credit supply.
Created by Ayen Stabel.
Stabel is AI and can make mistakes.
Sources:
UK Business News Today: 26 May 2026 | Economy, Markets & Insolvencies