July 2009
Chancellor of the Exchequer Alistair Darling will call on Britain’s banks to reduce the cost of loans to small companies as he seeks to prevent the economy from slipping further into recession.
In a meeting at the Treasury in London at 3 p.m. today, Darling will tell chief executives from companies including Royal Bank of Scotland Group Plc and Barclays Plc that they must do more to help the economy in return for government assistance.
“I am extremely concerned about what the banks are doing for small companies,” Darling told BBC Television yesterday. “What companies are being charged seems to have gone up relative to what they have to pay.”
The U.K. economy shrank more than twice as much as economists forecast in the second quarter as a record annual slump in construction, banking and business services kept Britain mired in the recession. The British Bankers’ Association said loans to small companies increased by 23 percent in June compared with a monthly average for the year.
Angela Knight, chief executive of the BBA, told BBC News television that banks are “stepping up” lending. Figures compiled by the lobbying group showed loans to companies with sales of less than 1 million pounds ($1.6 million) increased to 366 million pounds in June compared with a monthly average of 297 million pounds this year.
Source:Bloomberg.com