Industrials still struggling to get credit

Britain's manufacturers are finally finding it easier to get their hands on credit, the industry's representatives say, while also calling for a regulatory intervention to improve the flow of lending still further.

The EEF, the manufacturers' organisation, is calling for next month's final report from Sir John Vickers' Independent Commission on Banking to include a series of proposals for improving competition in the sector in order to make it more likely that all companies will be able to secure vital credit.

In the meantime, however, the EEF says the manufacturing sector, or at least parts of it, saw an improvement of credit conditions over the past three months, with fewer companies reporting an increase in the cost of borrowing, and the availability of loans improving slowly.

The EEF's chief economist, Lee Hopley, said: "Conditions are slowly heading in the right direction, but the overall picture remains far from being as supportive as we'd like.

"There is clearly more finance available but the fact that more companies are still reporting an increase in cost rather than a decrease suggests that firms are paying a price for it," she added.