Survey finds credit availability has not improved

A survey by the EEF engineering group has discovered that British companies are still struggling to obtain credit.

According to the manufacturers’ organisation, credit is more expensive today than two months ago.

The claim comes despite calls from the Government and business leaders to increase lending to businesses.

Commenting on its report, Lee Hopley, the chief economist of the EEF, said: “The recession and the crisis in financial markets have worsened the costs and conditions attached to accessing finance and the credit markets for many businesses, and despite the pick-up in the economy, few companies are seeing a significant improvement in lending conditions.

“This was never likely to be a swift or easy process, but we are concerned that the rise in the cost of new borrowing may be signalling that the supply of finance is not able to keep up the upturn in manufacturing activity,” he added.

The EEF’s survey of more than 300 companies found that over the past two months, the overall cost of credit for manufacturers was almost unchanged.

During the two-month period, 31% of companies reported an increase in the overall cost of credit versus 34% previously.

It added that the cost of new borrowing rose for 37% of companies, up from 32% in the previous survey.

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