Thursday, February 16, 2012

And still the banks betray our small firms: Despite all the promises, lending has fallen EVERY quarter for three years

The full scale of how the banks are still failing to lend to Britain’s desperate small firms emerged yesterday.

Despite a series of public promises from senior ministers and bank officials, lending to business has tumbled in every single quarter of the past three years.

Bank of England Governor Sir Mervyn King yesterday spoke out against the ‘harsh treatment’ of small companies which are still ‘suffering’ at the hands of the banks.

He said ‘market failure’ meant firms are being starved of the funds they need to grow, create jobs and drive the economic recovery.

The startling statistics emerged in Bank of England figures showing that net lending fell by £10.7billion in 2011 – in other words, the banks received £10.7billion more in loan repayments than they gave out in new loans. That took the total fall since the end of 2008 to £82.7billion. Read More