Jittery firms put the brake on borrowing before Brexit

Business borrowing fell for the first time this year in the lead-up to the Brexit referendum, new figures have shown.

The British Bankers’ Association’s latest data revealed a £526 million slide in borrowing taken on by non-financial companies amid signs of nervousness over the big vote — the first monthly fall in 2016.

The drop will heighten worries at the Bank of England about a slowdown in business investment across the wider economy which could even tip the UK back into a potential recession.

Governor Mark Carney loosened capital requirements for lenders in the week after the Leave vote, potentially allowing banks to pump an extra £150 billion in lending into the economy.

BBA chief economist Rebecca Harding said the figures “reflected the uncertainty that was felt ahead of the EU referendum” although it was too early to rush to judgment.

She added: “Overall, business confidence was clearly fragile in anticipation of the outcome of the vote, but these results are not a verdict on the health of the economy post-Brexit. We won’t start to see that data come through until the autumn and any trends before then should not be over-interpreted.”