UK banks must ‘resume lending’ to avoid fresh recession
LONDON — Britain risks falling back into recession unless its banks increase the amount they are lending to businesses and individuals, Business Secretary Vince Cable said in an interview with The Sunday Times.
“The top priority now, to boost growth and jobs and avoid a double dip (recession), is making the banks lend again,” he told the newspaper, as the Bank of England was on Wednesday expected to downgrade its forecasts for British economic growth.
“People’s living standards have been quite badly hit. That is only going to change if we get sustainable growth. It’s too difficult to say when,” Cable told the weekly broadsheet.
A double dip recession refers to a short-lived recovery from one recession and then a new plunge back into economic contraction.
Cable insisted Britain was well placed to weather the new global economic storm, in comparison to the financial crisis of 2008, amid debt contagion in the neighbouring eurozone and weakening growth in the United States.
“Back then, Britain was at the centre of the hurricane. This time round we are on the edge of the storm,” he said.
Cable, a member of the Liberal Democrats who share power in a coalition government with the larger Conservative party, said the Bank of England would “almost certainly” downgrade its growth forecasts this week.