The findings are part of the British Retail Consortium's (BRC's) Quarterly Credit Conditions Monitor which also found that, for those respondents who cited a fall in lending, over two-thirds of SME retailers said it had undermined their ability to trade and of these 60 per cent have reduced staff levels. Three-quarters of large retailers who reported a fall in bank credit reported they reduced stock levels as a result.
Despite the Bank of England keeping interest rates at historic lows for the last five months, 44% of SME retailers reported the cost of bank lending has increased over the last three months. The availability of credit will determine how quickly the UK economy emerges from the recession.
Jane Milne, BRC Business Environment Director, said: "As the Government launches its employment schemes, it's outrageous that some retailers are being forced to let staff go because of a lack of affordable credit.
"The poor availability of bank credit is undermining stock levels and retail employment. We understand the banks' current cautious approach to lending, but there's no reason why they need to stop loans to fundamentally sound businesses.
"I'm shocked to hear that over 40% of SME retailers said banks had increased the cost of lending in the last three months. We should all be doing our bit to help speed the recovery. How can these increased charges be justified?”
