Scottish borrowing sees fastest rise

Farm borrowing rose by 8.7% to £1506m in the year to May 31, 2010, according to Scottish Government figures. The £121m rise is the largest annual increase since 2000.

The increase reflected continued capital investment in several sectors including vegetable and livestock production, said Tom Vosa, head of market economics at National Australia Bank Groupwhich owns Clydesdale and Yorkshirebanks. With lower consumer debt levels in Scotland, there was also possibly more credit available.

The increase was not to a worrying level, said Scott Walker, policy director of NFU Scotland. As well as reflecting continuing capital investment in some sectors, the rise would also be accounted for by seasonal needs and the difficult prices in some sectors, in particular dairying.

Farmers in England and Wales were borrowing £11,863m at the end of June on facilities of £14,462m, which is a rise of around 5% and in line with what was expected.

Bank of England figures show that this is in contrast to most other industrial sectors where the statistics show falling borrowing, indicative of a drop in business confidence and banks’ willingness to lend, said NFU economist James Edwards.