The Bank of England has warned lenders not to be tempted to turn off the credit taps this autumn, saying businesses face a £200 billion cash shortfall and need financial support.
In evidence that Threadneedle Street is concerned banks might call in loans or fail to extend credit in order to conserve capital, the Bank argued it was in the “collective” best interests of the sector to keep lending.
If banks individually cut back lending to strengthen their balance sheets, they could not only push more firms into insolvency but tip the entire country into a “materially worse” slump, it said.
The warning came as the Office for National Statistics said that 213,285 businesses failed in the first half of 2020, a 14 per cent
