SMEs ‘seeing no benefits’ from Bank’s QE gamble

A survey of 100 companies by Skipton Business Finance revealed widespread scepticism about quantitative easing and its impact on the economy.

Nearly quarters of respondents said that the Government should pursue other methods to help stimulate the economy.

Two-thirds believe that the asset-purchase programme is not an effective long-term strategy for the economy.

More than 80 per cent of businesses said they are not seeing any effect of QE, adding to concerns that the main UK banks have been the big winners from the programme.

The survey will make grim reading too for the Government as it struggles to create the conditions for growth.

Ed Carney, head of marketing at Skipton Business Finance, said: “Many of the respondents to our survey were particularly vocal in expressing their disappointment at the way the economic situation is being handled by the Government.”

He added: “Many think-tanks and quangos have been calling for more QE, thinking that an injection into the financial system could give SMEs plenty of scope to look for new opportunities and that the increase in QE could result in banks weakening policy on business loans which would make money more readily available to SMEs.

“But many SMEs aren’t seeing the benefits of QE and our clients, a wide range of SMEs and owner-managed businesses that make up 99 per cent of enterprise in the UK, feel that the banks will more than likely be sitting on the funds from this initial round of QE to strengthen their balance sheets and reserves.”

He said that Skipton Business Finance, a subsidiary of Skipton Building Society, is focused on understanding clients’ businesses and helping them create wealth and jobs rather than simply making a profit.

It recently approved a £50m fund to support service, manufacturing and distribution businesses, which have been hit hard by credit crunch.