Lack of trust in banks holding back recovery

The Bank of England’s chief economist, Spencer Dale, said that British businesses’ lack of confidence in banks since the financial crisis is holding back economic recovery.

In a recent interview with BBC Merseyside local radio, Dale said many firms felt unable to rely on banks after access to credit was restricted in the 2008-09 financial crisis.

Dale went on to say “They are less willing to expose themselves to banks. They prefer instead to hoard levels of cash and insure themselves. That is one of the factors that is holding back our recovery”.

He reiterated that the central bank would not raise interest rates until the economy was back to full strength.

However in Dale’s view Britain’s economy had turned a corner, and was now recovering from the financial crisis.