Commercial mortgages may promote economic growth

16 November 2010

Written by Steve Olejnik

The lending of commercial mortgages may encourage economic expansion, as one expert has called for banks to allow businesses to borrow more money.

Justin Cooke, chair of the British Interactive Media Association and chief executive of Fortune Cookie, argued quantitative easing is only a temporary measure to buoy the economy and other measures should be taken.

"The government needs to encourage banks to lend money to SMEs [small to medium-sized enterprises] and look at new ways that we can promote international trade and international investment in the UK," he explained.

Quantitative easing is not enough, the specialist claimed, saying it would ultimately weaken sterling.

Additionally, more firms may be looking for commercial mortgages, as Mr Cooke noted companies were regaining confidence in the economy and have become bullish.

The latest BDO Optimism Index, which shows how businesses expect to trade in six months' time, showed output hitting a 16-month low, with partner at the organisation Peter Hemington warning the outlook for growth remains "gloomy" in the near term.

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