Corporate banks cautious as public borrowing hits record high?

Corporate banks might be trading cautiously at the moment, as the Office for National Statistics revealed today (September 21st) public borrowing has risen to a record high.

The net borrowing figure for August stands at £15.9 billion, higher than most economist's predictions, which forecast the figure to be around £12.5 billion.

For corporate banks, the news might discourage bold lending to potentially risky organisations, as the high level of debt present in the country indicates financial instability is a concern and might be more difficult to deal with if the economic recovery were to falter.

Mark Bolsom, head of the UK Trading Desk at Travelex Global Business Payments, commented: "The markets are willing to give the coalition the benefit of the doubt, but the pressure is on to deliver a credible austerity package without choking off economic growth."

Net debt for the period in question is equivalent to 56.3 per cent of gross domestic product.ADNFCR-2318-ID-800074202-ADNFCR