Commenting on the decision by the Bank of England’s Monetary Policy Committee to hold interest rates and the current level of Quantitative Easing steady for September, Scott Knowles, Deputy Chief Executive of the Derbyshire and Nottinghamshire Chamber of Commerce (DNCC), said: “Keeping interest rates at their historic low levels is playing a crucial role in underpinning business confidence and we don’t see this changing for some time.
“However, to boost growth, there must be a revival in business lending. The latest statistics from the SME Finance Monitor* – which echo the Chamber’s own research** – demonstrate that there are still serious obstacles for many companies seeking external finance and the number of successful applications has fallen. Many companies still say they feel discouraged from applying or are put off by the process.
“The British Chambers of Commerce this week published its case in favour of creating a state-backed British Business Bank*** which would sit alongside commercial banks and help fund new and growing businesses – a proposal which is supported by DNCC.
“Many local firms are less confident of a successful application for finance in the future and there is more to be done to restore relationships, improve transparency and rebuild trust between businesses and banks. A dedicated Business Bank would fill the gap left by deleveraging commercial lenders over the long-term by addressing the issue of discouraged demand and offering support to the dynamic, new companies that could be the growth engine of the UK.”