Business borrowing slows amid economic uncertainty

Businesses have borrowed less and saved more during the course of 2017 amid uncertainty about prospects for the economy, industry figures show.

Non-financial companies repaid a net £374m of borrowing to banks in September, the fourth month of borrowing reduction, according to figures compiled by UK Finance.

Mortgage and consumer lending have increased this year in contrast to the more cautious approach taken by businesses. UK gross mortgage lending was £21.4bn in September, up 5% from a year ago.

Credit card borrowing from high street banks rose 5.5% in September from a year ago and growth in card business across all lenders was 7.8%, reflecting resilient consumer spending that has supported the economy.

UK Finance, the financial sector's trade association, said wholesale and retail businesses had reduced borrowing the most. It suggested this was because these companies were most exposed to potential reductions in consumer spending.

The economy grew 0.4% in the third quarter of 2017, official figures showed on Wednesday. But concern is mounting that the UK is heading for a sticky patch amid uncertainty about Brexit talks and doubts about consumers' ability to keep spending to keep the economy growing.

Mohammad Jamei, UK Finance's senior economist, said: "Businesses remain cautious about the future amidst an uncertain economic environment, reflected by their growing deposit activity and a dip in their borrowing growth rate."