Big firms win out in hunt for credit

During January, the bank’s agents reported that bad weather had lowered the growth rate of household spending, with consumer services more badly affected than retail sales.

Foreign demand was providing a boost to manufacturing output, but conditions for domestic-facing firms remained weaker.

The agents reported that credit continued to be more widely available for large firms, but much harder to find for small ones.

Many smaller companies are focusing on paying back debt.

The report said: “Small firms reported that credit conditions remained tight. There were a few reports of an improvement in access to bank finance, although the ongoing shift towards lower risk and more costly forms of lending was thought to have continued.”

On a positive note, more private sector firms said they were planning to hire staff.

The agents’ contacts in the manufacturing and services sectors indicated that they were planning to recruit more workers, albeit cautiously.

The Bank of England has a number of offices in the regions, including a base in Leeds, where the regional agent is Paul Fullerton. The Bank’s Monetary Policy Committee uses the agents’ reports to help it set interest rates.