'Improve credit access' urges CBI

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The credit crunch will get worse for British firms without government action to improve access to new finance, business group the CBI says.

It said 63% of 131 firms it surveyed believed access to funding had deteriorated in the past three months.

The government must implement its various support packages as quickly as possible, it added.

The plea comes after official figures showed manufacturing output in December fell at its fastest rate since 1981.

'Lack of clarity'

CBI director general Richard Lambert said: "We have urged the government to move as quickly as possible to set out when the various support packages to tackle the credit crunch will come into effect and to implement them quickly."

The CBI said a "clear timetable" would increase business and consumer confidence and help firms plan for the future.

Mr Lambert said bigger firms were finding it hardest and most expensive to get credit.

"Day by day, constrained credit is damaging our economy. A lack of clarity creates a fear, the worst mentality, and could be costing people their jobs."

The CBI also warned that a lack of available trade credit insurance is a "real problem for firms that rely on it".

Credit insurers cover suppliers against the risk of their customers going bust before paying for the goods supplied.

The CBI survey was conducted between 14 and 22 January. Some 63% of firms which had sought new finance said the availability had worsened in the previous three months. Some 59% said they expected it to worsen further over the next three months.