Commenting on the public finance figures published today by the ONS, and the bank lending figures released by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The new figures are disappointing. Government borrowing in June was slightly worse than expected and confirms the need for the tough measures announced in the Budget. At the same time, these measures will inevitably worsen the downward pressures on the economy and increase the dangers of a setback. It is vital in these circumstances for interest rates to remain as low as possible for as long as possible. There may also be a need for the MPC to seriously consider increasing the quantitative easing programme.
“The risks facing the economy are further reinforced by Bank of England data showing that lending to businesses remained negative in May, a further deterioration since April. This fall in lending reflects both weak demand in the face of serious economic risks and supply constraints within the banks that will have to be removed. The need to counter the risks of a double-dip recession must be given the highest priority.”