SCC Welcome New Lending Stimulus but Further Action Needed

Friday 15th June 2012

Commenting on the news that the Bank of England is to launch two new stimulus packages aimed at increasing bank lending to businesses, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“We have been saying for some time now that the Bank of England’s policy of quantitative easing was limited in its effectiveness if progressed in isolation.  QE can only be truly effective if it results in additional lending to businesses on terms that firms can afford.  These latest stimulus packages do look to be attractive additions to the suite of policies the Bank of England is deploying to boost our economy but the proof of the pudding will be in the reaction of the banking sector to the package and whether it provides them with the confidence and security they need to deliver credit where it is needed in our economy.

“However there remain two additional underlying factors affecting the flow of credit and the ability of businesses to succeed and lead Scotland back on a path of growth.  The first is the need for the UK Government to develop a stronger policy for growth to ensure that both it and the Scottish Government have an increased capital budget to deliver the kind of investment in infrastructure that can secure jobs and investment now and in the longer term.  Secondly, there remains the question of the relative lack of competition in the business banking sector.  The UK Government and the Bank of England may be missing a trick in terms of the creation of a business bank to bolster lending direct to those businesses that need it most.”

Back to main news page