Significant Increases In Loan Charges On The Way

Mon, 29 Sep 2008

A severe lack of funding is causing a number of UK banks to increase interest rates for British borrowers, financial experts have claimed.

According to experts, banks are looking to claw back funds from their customers to help boost funding, with lenders Lloyds TSB, RBS and Barclays among the institutions that have to raise up to £10 billion each.

US investment bank JP Morgan recently revealed that "significant increases in the cost of loans are on the way" as the aftermath of the US financial meltdown continues to worsen.

The problems facing an increasing number of US lenders is having a knock on effect in the UK, with British lenders being put under increasing pressure especially with more homeowners and businesses expected to default on their loans in the next few months.

A spokesman for the US bank added that the slump in demand for loans and lending "are likely to put additional pressure on the economy and lead to more credit quality deterioration".
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