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In leveraged mortgage markets, the trend of elevated prevalence of looser underwriting requirements has continued, which will increase dangers to end-investors. The Bank has acquired data on 2 million restricted firm SMEs.footnote Staff analysis of these knowledge exhibits that the share of SMEs with debt has greater than doubled over the Covid interval, with round 757,000 SMEs within the pattern now holding debt. The vast majority of new debt has been issued at comparatively low rates of interest through government-guaranteed mortgage schemes. The combination of financing and government help has also led to an enchancment in UK businesses’ aggregate liquidity positions. Overall, businesses’ cash balances have increased by £152 billion (or 29%) since end-2019. Around half of SMEs held at least one month’s value of turnover as money reserves … Read More
