BCC warns of need to alleviate pressures on credit

Date: Tuesday 10 Jan 2012

The results of the British Chambers of Commerce’s Quarterly Economic Survey (QES) point to a period of “stagnation” in early 2012 and a further deterioration in the economic situation.

Of particular importance, expectations for the coming three months are said to have significantly weakened.

The situation is such that the BCC’s chief economist, David Kern, has come out in favour of supplementing a new round of asset purchases from the Bank of England with the introduction of a sizable and effective credit-easing programme. Otherwise, quantitative easing (QE), “will not achieve its full potential in supporting growth,” Mr.Kern has said.

In the same vein John Longworth, Director General of the BCC, said, “a new recession is not a foregone conclusion. However, action is needed urgently to tackle short-term stagnation and a lack of business confidence, damaged by the ongoing Eurozone crisis.”

What is the solution in Mr. Longworth’s opinion? Putting business first. More specifically, he calls for measures to improve the flow of credit to businesses (including the creation of a “full-blown” SME bank should implementation of the credit easing programme take much longer), reforms to the United Kingdom’s complex planning system and investment in infrastructure projects.

AB

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