4R Blog

RSS Feed

BCC calls for business lending boost

Date Added: 02/08/2013  

The British Chambers of Commerce (BCC) has told the Bank of England's Monetary Policy Committee (MPC) that it should take action to improve business lending in the UK.

Recent data has shown lending to small to medium-sized enterprises (SMEs) has dropping in the last 12 months despite the launch of the Funding for Lending Scheme last summer.

The Bank of England teamed up with the government for the programme, but many SMEs have found their access to finance is still restricted. The scheme aims to lift lending by offering banks incentives to increase the amount of money they loan to businesses.

David Kern, chief economist at the BCC, stated that the decision made earlier in the week by the MPC to hold interest rates for another month was the correct one. The base rate has stayed at 0.5 per cent - a record low for the UK - for more than four years.

It was pointed out by Mr Kern that it is unlikely the quantitative easing scheme is going to be increased by the MPC any time soon, while interest rates will stay low for the foreseeable future.

"This is a positive shift in emphasis - and we hope this will be confirmed when the MPC presents its response to the Chancellor on how forward guidance should be used, expected next week," said the BCC representative.

But he called on the MPC to take more action to improve business lending in the UK. SMEs are often hailed as the backbone of the economy and unless they are given the tools they need to grow, many may be forced to take company debt advice to survive.

The UK economy is growing slowly, with 0.3 per cent expansion in the first quarter increased to 0.6 per cent in the second, but this could soon stagnate if firms are unable to expand.

Analysts have predicted the UK's economic growth for the whole year is likely to be slightly above the one per cent mark.

Need advice on Winding up Orders? Call 0800 9020123

Posted by Julie Cutts

Get the Help You Deserve

0800 90 20 123

Urgent Help Call 24/7

020 7183 2606

We'll Call You

Request a Callback