Carney Must Boost Credit to Ensure Recovery, BCC SaysFergal O’Brien
Bank of England Governor Mark Carney must focus on boosting lending to help maintain Britain’s recovery, according to the British Chambers of Commerce.
The BCC said in a survey in London today its measures of sales at manufacturers and service companies rose in the second quarter. Still, the report also showed declines in some investment gauges and “weak cashflow.”
“They are a warning that economic growth could be slow, and a reminder that a sustained upturn cannot be taken for granted,” BCC Director General John Longworth said in a statement. “For these reasons, business access to finance, and working capital in particular, must be assured.”
The report comes a day after Carney began his governorship of the BOE. The BCC published an open letter yesterday calling on him to boost lending by expanding the Funding for Lending Scheme and widening the central bank’s quantitative-easing program to include securitized debt from smaller companies.
Carney will lead his first meeting of the Monetary Policy Committee this week, and all 44 economists in a Bloomberg News survey forecast that QE will be kept at 375 billion pounds ($571 billion). Goldman Sachs Group Inc., among those predicting no change, said it is “more likely than not” the MPC will issue a statement after the meeting, something it typically doesn’t do.
In its report, the BCC said its index of manufacturers’ domestic sales rose to 16 from 12 in the first quarter, while export sales increased to 23 from 19. For services companies, the domestic gauge jumped to 20 from 12, while the export measure rose to 36 from 33.