Hotels and restaurants pull out of recession

The hotels and restaurants trade could be the first sector to start moving out of recession, according to figures released by the British Bankers' Association today.

Although lending to business remained in general decline during October, lending to hotels and restaurants showed the first upturn for two years.

David Dooks, statistics director at the BBA, said: "Property-related companies and hotels and restaurants were the last industrial sectors to cut back their borrowing throughout 2009 and 2010 and there may be signs of those sectors emerging first.

"The level of borrowing by hotels and restaurants is now higher than it was a year ago."

Consumer borrowing rose by just £100 million last month, which is well below the normal long-term average.

The BBA said demand for overdrafts and spending on credit cards were outweighed by people paying off their debts.

Howard Archer, chief economist at IHS Global Insight, said: "Signs remain that consumer appetite for taking on new borrowing is very low while there is also a strong desire of many consumers to reduce their debt clearly the consequence of current heightened concerns over the outlook for the economy and jobs."