Banks are 'starving businesses'

Date: 26th February 2010

British businesses are being starved of in important funding by British banks.

This is the view of the Liberal Democrat party, which said the current level of business investment in the UK is bad news for the economy.

The comments follow the publication of an Office for National Statistics (ONS) report, which revealed that investment by British businesses was 24.1 percent lower at the end of 2009, compared with the start of the year.

According to the Lib Dems, this is the worst decline since the ONS began collecting the data.

John Thurso, the party's business spokesman, said: "This dramatic slump in business investment bodes ill for economic recovery.

"Banks are failing to meet their lending commitments, starving businesses of capital needed for investment. The government needs to get a grip and make sure the banks' lending agreements are more concrete and better policed so that recovery doesn't peter out."