At the Bank of England’s February inflation report this morning, Labour MP Nick Ainger said he finds it “objectionable” that banks have received billions of pounds but do not seem to be lending more money to consumers.
Ainger said: “They signed the agreement and we have been thrusting billions at them and the ordinary person out there seems to be saying, well what about their side of the agreement? Now that all seems to be bad behaviour by the banks who have agreed to do something and seem not to be doing it.”
BoE Governor Mervyn King said he shared these concerns and said that it could take time for the money to filter through and increase the amount of lending.
King said: “I accept that so far the lending data has not been encouraging but we are just now at the point at which if these lending agreements which banks have signed are to have an impact, we should expect to see it come through.”
King said the lending agreements needed to be specified in quantitative terms so that banks were given clear lending targets.
TSC chairman John McFall added: “As a committee we are a wee bit frustrated with UKFI because we are not really sure of its mandate or what it is doing because it negotiated these lendings agreements and we really need transparency.
“What we picked up in our visits around the country was a lot of anger and frustration and betrayal and if the transparency is not there then taking the public along with us is going to be a lot harder.”