Cable accuses banks of halting recovery

Britain's economic recovery is being held back because the banks are "throttling" it, business secretary Vince Cable has said.

Britain's economic recovery is being held back because the banks are "throttling" it, business secretary Vince Cable has said.

Speaking on the BBC Andrew Marr show, Mr Cable accused banks of being "anti-business" in their attitudes, preferring short-term returns over longer-term goals.

He added: "There has been a breakdown in the mechanism, in the transmission. It just doesn't get through to companies. We are going to ensure that the new money that the chancellor and the governor of the Bank of England talked about at the Mansion House does actually directly reach the companies."

The issue Mr Cable identified may be one the government can tackle successfully. Firm action to hold the banks to account might prove popular with the public after a series of recent banking problems. These ranged from system failures stopping some people from accessing their money to the Barclays Libor scandal.

However, in the meantime, a slow economic recovery or continued recession could lead to more consumers losing their jobs and finding they cannot manage to pay back their loans or credit card debt due to the sudden drop in income.

Those hit by such a situation may find debt management plans are a useful way of spreading payments out until they can get new jobs and back on to an even keel.

In recent months, unemployment has actually fallen, but a survey by the Recruitment and Employment Confederation and KPMG has indicated this could soon change.

It indicated hiring activity at firms fell markedly in June and KPMG head of business services Bernard Brown suggested the next few months could be bleak on the job front.

Discussing the recent trend, he noted there has been a rapid "acceleration" in the decline of hiring.

As a result, he suggested, it is possible the UK could see unemployment rise as high as three million in the "not too distant future".

By Joe White

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