The level of bank lending to UK business fell again in June, according to a Bank of England report, meaning troubled firms have less chance than ever of surviving a cash crisis.
Bank lending plummets £3.5bn
The level of bank lending to UK business fell again in June, according to a Bank of England report, meaning troubled firms have less chance than ever of surviving a cash crisis.
Net monthly lending to business fell by £3.5 billion in the month compared with May and was 8.1% lower than in June 2009, when the credit crunch was not long past its most severe.
The Bank of England introduced quantitative easing – increasing the money supply for lending – in March 2009, arguing this would increase the credit available to business.
Instead, the latest figures show a 3.6% drop in lending to small businesses in the second quarter of this year, underlining fears of a double-dip recession.
The recent spate of failures among travel firms – seat-only operator Kiss Flights, retailer Sun4U, attraction-ticket supplier Keith Prowse and tour operator Goldtrail Travel have ceased trading in the last month – has been largely due to financial difficulties.
