date: 9 February 2012
embargo: For immediate release
Commenting on the Bank of England's decision today (Thursday) to hold interest rates at 0.5 per cent and resume quantitative easing, TUC General Secretary Brendan Barber said:
'Holding interest rates and resuming quantitative easing is the right thing to do given the weak state of our economy.
'But more needs to be done to ensure that this latest injection of cash actually reaches the businesses that need it, rather than just gathering dust on banks' balance sheets.
'The failure of banks to increase net lending to businesses, despite £275bn of quantitative easing, is holding back growth in the real economy.
'The Chancellor needs to exert more influence in forcing banks to lend and get credit easing up and running given failure of his Project Merlin deal.'
NOTES TO EDITORS:
- According to the recent TUC report Banking after Vickers, total bank lending to firms outside of finance and real estate must more than double in order to meet the investment needs of the UK economy over the next decade.
- Banking after Vickers sets out four challenges facing the UK banking sector: low investment, SMEs, sectoral and geographical rebalancing of the economy and green growth. The report is available atwww.tuc.org.uk/bankingaftervickers
- All TUC press releases can be found at www.tuc.org.uk
Issued: 9 February, 2012