Lending to improve soon, says minister

The level of lending in the UK economy will soon increase, business secretary Lord Mandelson has said.

Speaking to the Independent, the minister predicted that the moves made by the government and Bank of England to increase capital and liquidity in banks, plus the actions taken to bail out the Royal Bank of Scotland and Lloyds TSB, will make a difference.

People "should start to see a change in lending behaviour" as a result of these measures, he stated, adding that while this will not "happen overnight", it should occur "fairly soon".

The result will be a "stronger pattern of lending emerging", he remarked.

Such developments could be good news for first-time buyers seeking a mortgage and may help reverse a recent fall in mortgage lending figures.

Data published today by the Council of Mortgage Lenders has revealed that the February gross lending total was the lowest since 2001.

The month saw £9,900 million of mortgages issued, compared with £25,043 million in February 2008.