Banks must “redouble their efforts” to ensure that funding filters down to small and medium-sized enterprises, business leaders said yesterday, after a sharp fall in lending.
The Bank of England’s latest Trends in Lending report showed overall business lending shrank by 3.1 per cent in the year to August, with smaller firms in particular finding it tough to obtain credit.
Adam Marshall, director of policy at the British Chambers of Commerce, described the figures as “disappointing”, saying: “These numbers reflect underlying uncertainty across the economy.
“The Bank of England, the government and the banks must redouble their efforts to ensure that the much-heralded Funding for Lending scheme benefits businesses in the real economy.”
Matthew Fell, CBI director for competitive markets, said: “With Funding for Lending helping to improve conditions in the wholesale funding markets, we now need to see a similar push on lending to small and medium-sized firms.”
The flow of loans to businesses fell by more than £2 billion in the three months to August.