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Hotel and restaurant sector leading the way out of recession

If figures released today by the British Bankers' Association are to be believed, the hotel trade could be the first sector to start moving out of recession.

Lending to the hotels and restaurants sector showed the first increase for the best part of two years, whilst lending to other business sectors generally fell in October.

Consumer borrowing only rose by around £100million last month, which is still far below the expected and long-term average.

Statistics director at the BBA, David Dooks 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.”

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

Chief economist at HIS Global Insight, Howard Archer also added: “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.”

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