The Bank of England has warned the City against making “excessive” cuts in lending to households and businesses as the economy slows because of the risk of exacerbating a downturn.
It said yesterday that the outlook for the economy had “deteriorated materially” in recent months after Russia’s invasion of Ukraine stoked inflation, which is fuelling a cost of living crisis.
The bank said there were already “tentative signs” British lenders were becoming more cautious. It told banks that it would be “counterproductive” to shore up their balance sheets by withholding new loans.
