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It appears that credit conditions in the UK are starting to improve, with lenders increasing "slightly" the availability of secured credit to households in the second quarter.

That rise was the first since the third quarter of 2007 and a net balance of lenders think there'll be another increase over the next three months.

But the survey by the Bank of England revealed that unsecured credit availability to households fell during the period, with a further small reduction predicted over the next quarter.

It sees demand for secured lending remaining broadly unchanged over the next three months.

Businesses enjoyed better access to new money thanks to improved cost and availability of funds and lenders' market share objectives.

Default rates on secured and unsecured lending to households and companies rose though and are set to increase again going forward.

Today's report suggests policy measures adopted by both the Bank of England and the government, including the £150bn programme of quantitative easing, are boosting the flow of funds

"The survey raises hopes that credit conditions will increasingly become less of a constraint on economic activity over the coming months," says Howard Archer, chief UK economist at IHS Global Insight. "This is critical to recovery prospects."

Pay growth stayed steady at 2% in the three months to May according to the latest data from pay consultants IDS.

"Our findings show a significant retrenchment on pay and jobs in 2009 is taking place alongside continued, albeit more modest, pay awards," said Ken Mulkearn, editor of the IDS report.

Official data earlier this month showed average earnings excluding bonuses rose by 2.7% in the three months to April, the slowest rate of growth since records began in 2001.