Banks

UK banks have failed to reach the levels of small business lending that were agreed under Project Merlin.

The latest rise in inflation means that ever more savers will be struggling to retrieve a return on their money.

The cost of loans imposed by banks is hindering the ability of small firms to drive economic recovery, it has been claimed.

Loan applications from SMEs are still very subdued, new figures suggest.

News that the Consumer Prices Index rate of inflation dipped back from 4.4 per cent to 4 per cent in March may not bring much relief to the UK’s savers.

Savers who are willing to keep their money in long-term savings accounts are benefiting from improved interest rates.

Loan applications from smaller firms showed a decline in the first three months of the year.

The commitment by the major banks, announced as part of the Project Merlin deal struck with the Government, to increase lending to smaller firms has been broadly welcomed, but questions remain, insist small business organisations.

The Chancellor, George Osborne has said that the levy charged on bank profits is to rise by an extra £800 million this year.

Small businesses are continuing to experience difficulties in accessing finance, according to the Bank of England.