Member Article

BCC urges BoE Governor to support UK business

Mark Carney, the new Bank of England Governor, has been urged to do more for UK businesses by the British Chambers of Commerce (BCC) director general, John Longworth.

In an open letter, Mr Longworth said more must be done to secure the country’s competitive edge in business, although he conceded the economic situation has improved since Dr Carney’s position was announced.

BCC urged Dr Carney to make use of the British Business Bank and ensure current schemes such as the Quantitative Easing programme and Funding for Lending are used to support “real” businesses.

Mr Longworth said: “While we are seeing signs of a stronger recovery across the business community, we have no illusions about the challenges ahead for the UK economy, nor the complexity that you and your colleagues on the MPC will face in shaping monetary policy.

“That said, we believe that the Bank of England can take real action under your leadership to help entrench that recovery and secure our future competitiveness – by helping to secure the flow of finance to the new, growing and dynamic businesses that need it most.”

In his letter, he set out three main recommendations for Dr Carney to use the Bank of England’s influence and balance sheet to benefit business.

Firstly, SME finance should be supported by the Business Bank alongside private financial institutions, which BCC hopes will unlock different sources of growth and risk capital.

Mr Longworth even complimented Dr Carney through his Canadian connections, as he said: “We are struck by the success and importance of the Business Development Bank of Canada in your native country, and hope that you can help the Business Bank to develop a similar vision and remit.”

A further two recommendations were made to use existing schemes to support what Mr Longworth called the “real economy”, and lastly said that UK infrastructure should be supported by private investment and the Treasury.

He concluded: “We would also ask that you focus on ensuring a stable business environment. This can be done by giving business as much certainty as possible on low interest rates, which have played a critical role in underpinning both business and consumer demand.

“At the same time, BCC’s Quarterly Economic Survey shows that inflation is a significant concern for companies across the economy. The MPC’s decision-making must take both of these important business concerns into account.”

This was posted in Bdaily's Members' News section by Miranda Dobson .