9 March 2026

Less than 1 in 10 pounds of bank lending going to productive investment

Campaigners hit back at banks’ calls for tax cuts and looser rules

London, 9 March 2026 - Less than one in ten pounds of UK bank lending went towards productive investment in the real economy in 2025, according to new analysis from think tank Positive Money.

Assessing the Bank of England’s latest annual money and credit data, Positive Money found that 85% of all new credit created by banks in 2025 was allocated to activities that were speculative and financial, rather than producing new goods and services. By contrast, less than 7% of net new lending went to productive sectors, and barely 8% was created as consumer credit.

This flies in the face of claims made in February by the UK banking sector that excessive regulation and a heavy tax burden are making it less competitive and preventing it from boosting lending to productive industries, such as construction and manufacturing, since only a tiny fraction of bank lending goes to these activities anyway.

The analysis finds that bank lending is still heavily concentrated towards boosting the value of existing assets, such as property or stocks and shares, rather than the creation of new ones, such as schools, hospitals and small businesses. Last year, for every £6 in credit created for mortgages, only £1 was created for the productive industries.

And although net lending to productive industries increased by £9bn in 2025 - its most in five years - this figure still pales in comparison to the £52bn increase for mortgages and the £68bn increase for the Finance, Insurance and Real Estate (FIRE) sectors, which now account for 57.1% and 28.1% of all bank lending, respectively.

Alec Haglund, Senior Researcher at Positive Money and author of the research, said:

“Banks have been busy telling the papers that they need cuts to taxes and regulation in order to boost lending and therefore growth. But the data shows us that banks aren’t interested in lending to the real economy, and the only growth created by speculative lending takes the shape of bubbles liable to burst.

“After narrowly avoiding tax rises in the Autumn Budget, this egregious display from the banking sector shows just how emboldened the Chancellor’s pro-business rhetoric has made the City of London.

“Far from showing gratitude, the banks are already back for more. The Chancellor should take a leaf out of Alistair Darling’s book and resist the hounding of the banking lobby, opting for better regulation, not less regulation, when it comes to this unwieldy industry.”

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