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Firms "still struggling to access finance"
THE £200bn injected into the financial system to boost lending has not filtered through to Britain's small and medium-sized businesses, a survey claimed today.
The British Chambers of Commerce (BCC) said 33% of companies reported that accessing finance had been more difficult over the past three months, a deterioration on the 20% reported in June.
A further 64% of respondents to the BCC's monthly business survey reported no change in finance availability, while just 3% said the situation had improved.
As well as battling with continued lending constraints, the 400 businesses questioned in the survey were gloomy about general trading conditions.
The study found that 64% of participants said their biggest barrier to growth over the next 12 months was the lack of customer demand.
BCC director-general David Frost said: "Our latest survey results show that the biggest issue facing British businesses is still demand for products and services. This means that any economic recovery is still fragile."
Mr Frost added: "It is clear that the huge sums that have been injected into the financial system by quantitative easing are still not reaching small and medium-sized businesses in anything like the scale required for business to invest for future success.
He said the Pre-Budget report on December 9 must include measures that encourage companies to invest and improve confidence.
"Announcing that 2011's planned increase in National Insurance contributions will be scrapped would be a good start," Mr Frost said.
Figures from the Bank of England recently showed money growth shrinking by 0.9% in September - compared with anaemic 0.1% growth in August - despite its efforts to pump 175 billion into the economy through quantitative easing.
Lending to businesses was down 0.1% and was 3.4% lower than a year ago, the figures showed. The Bank's monetary policy committee voted this month to inject another 25 billion over the next three months.
Part-nationalised Royal Bank of Scotland and Lloyds Banking Group are under pressure to increase lending, having signed up 39 billion in lending commitments to homeowners and businesses.
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Weather for Yorkshire
Thursday 24 May 2012
Today
Sunny spells
Temperature: 10 C to 25 C
Wind Speed: 12 mph
Wind direction: North east
Tomorrow
Sunny
Temperature: 9 C to 21 C
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