BUSINESS LENDING FIGURES DOWN
October 18 2012.



- Stock of lending to UK businesses fell by over £2bn in the three months to August 2012

- Data highlights continued contraction in lending to small- and medium-sized enterprises

Commenting on the latest Trends in Lending report published today by the Bank of England, reporting data from the three months to August 2012, Dr Adam Marshall, Director of Policy at the British Chambers of Commerce (BCC), said: "The Bank of England's latest figures show disappointing to see both a decline in business lending and a decline in the overall stock of business loans in the Bank of England's latest figures. These numbers reflect underlying uncertainty across the economy. However, they also suggest that the banking sector is continuing to deleverage, that the cost of credit has not come down despite repeated interventions, and that there are still many businesses out there who say that cannot access the credit they need.

"BCC research shows that half of firms mistrust banks and building societies, and that one third would not feel confident securing external finance. Financial institutions need to rebuild trust and repair damaged relationships with businesses and improve transparency to get the flow of credit moving again. 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. We have consistently said that ministers must press ahead with the creation of a fully-fledged British Business Bank that can help viable and fast-growing companies get access to capital. These statistics also show that the Business Bank will need to be able to lend directly to some companies in future."