Retailers fear that banks are hoarding cash and not passing on historically low interest rates, as the British Retail Consortium (BRC) revealed more than four out of 10 retailers had seen the cost of lending increase.
A quarterly study of small retailers by the BRC found that 44% were hit by higher lending costs over the last three months, while the base rate remained steady for five months at 0.5%.
The results of the study came after Chancellor Alistair Darling grilled bank chiefs over business lending.
Jane Milne, business environment director at the BRC, said: “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?”
The study also revealed that of those retailers struggling with a lack of credit availability, more than 60% had axed jobs and over two thirds said it had undermined their ability to trade.
“The poor availability of bank credit is undermining stock levels and retail employment,” added Ms Milne.