Interest rate gap reaches record levels
Oakeshott claims banks "are choking Britain's economic recovery"
The gap in interest rates paid by small and large firms has reached record levels, with some small businesses forced to pay twice as much interest as major companies.
According to new figures from the Bank of England, released yesterday, a small company borrowing up to £1m pays an average rate of 3.69% on the money they’re lent.
However, a large company which borrows at least £20m is forced to pay just 1.78%.
The figures also revealed that, between March 2010 and April 2011, net lending to all firms fell to -£21.4bn – even though the government has urged the banks to make more money available, particularly to smaller firms.
Lord Oakeshott, the former Lib Dem treasury spokesman, said the figures “are gruesome evidence that our banks are choking Britain’s economic recovery.
“Project Merlin’s a farce: the government must act now on the banks to stop small businesses seizing up.”