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BCC calls on government and Bank of England to boost business lending

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BCC calls on government and Bank of England to boost business lending

The Monetary Policy Committee (MPC) should consider ways in which it could stimulate business lending by improving the efficiency of quantitative easing (QE) and looking at new methods for boosting the market.

That's according to David Kern, chief economist at the British Chambers of Commerce (BCC), who argues that current measures do not go far enough in increasing the UK's prospects for economic growth.

"The MPC is unlikely to make any changes this month, but it must be prepared to play its part in stimulating economic growth," he explained.

"To boost growth, the Bank of England and the government should help to revive business lending, both by using QE more efficiently, and by considering tools other than QE alone.

"Since UK banks are still weak, and the regulatory burden on them is likely to increase further, implementing a fully-fledged British Business Bank is clearly the most effective way of securing an increase in lending."

While there is little indication that the Bank of England would consider taking such a step, Mr Kern's comments highlight the perceived need to improve the flow of finance to British businesses.

Indeed, for those looking to acquire fresh offices or commercial property in London as a means to build a base in one of the world's strongest economic centres, potential plans could be dependent on the availability of funding.

If firms are unable to secure the support they need to either rent or purchase space in the capital, there is the risk that business could suffer as a result of tough lending practices hindering their prospects.

What's more, with a recent DTZ survey revealing that the West End of London boasts the most expensive office space in the world, companies hoping to break into the capital are likely to need strong financial backing.

As the country aims to avoid another recession, finding the most effective ways to stimulate economic growth is expected to remain among the chancellor's top priorities in the coming months.


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