Business chiefs today called on the Government to ensure banks were lending to businesses following a report which shows the UK’s battered financial services sector may be on a “gradual path to recovery”.

Financial services firms are more upbeat than they have been for two years despite continuing falls in levels of business, income and profitability in the industry for the three months to June, a report by the CBI business group said.

And in the latest British Chambers of Commerce Monthly Business Survey, over three-quarters of companies said they believed the Government had so far failed to present an appropriate strategy explaining how they will restore the UK’s finances to health.

The results from 400 companies also revealed that despite commitments to increase lending, businesses still face real difficulties accessing finance. A mere six per cent of firms thought credit was easier to get hold of over the past three months, while a fifth said access had worsened.

Shropshire Chamber of Commerce today said the Government needed to take action to show businesses that there was a clear plan for recovery.

Richard Sheehan, director of Shropshire Chamber, said: “It is clear the Government has more to do if businesses are to be convinced there is a comprehensive strategy in place to improve the dire state of the nation’s finances.

“What is particularly concerning is how few businesses are reporting improvement in access to finance. If the banks do not grasp the nettle and start lending effectively to the private sector they will simply be playing a part in prolonging this downturn.

“Banks have a responsibility not just to lend, but to lend to the wealth creating sectors of the economy.”

Hopeful

The CBI survey also showed that parts of the financial services sector – including insurance companies and banks – are hopeful that business volumes will rise in the coming quarter as industry declines slow.

But it warned that while demand might pick up in the coming months, firms remain under pressure and predicts “significant job losses and cuts to investment”.