Will banks lend to ‘support the British economy’ like the Bank of England wants now they can pay dividends?

The Bank of England says banks can pay dividends again. But it wants them to keep lending too, writes James Moore

Threadneedle Street has voiced concerns about levels of unsecured debt (Reuters)

Just over 10 years ago now, the British public bailed out this country’s banks in spectacular fashion. Now the banks are being asked to return the favour.

“Households and businesses are likely to need continuing support from the financial system as the economy recovers and the government’s support measures unwind over the coming months,” said the Bank of England’s Financial Policy Committee (FPC) in its latest financial stability review.

Threadneedle Street voiced particular concern about lower-income households “as they faced more persistent shocks to income and were less likely to accumulate savings” through the course of the pandemic.