THE availability of credit to individuals and businesses is expected to improve during the coming three months in a sign that the credit crunch may be easing, a report showed today.

Around 15 per cent more banks and building societies said they expected there to be a small increase in lending to households during the second quarter, the first time they have predicted a rise since September 2007.

More than a quarter of lenders also expected an increase in the amount of credit being made available to businesses following an improvement in the cost and availability of funds, the Bank of England report said.