David Cameron: Banks need to increase lending

18 May 2011

David Cameron has claimed that UK banks need to increase their lending levels.

The British prime minister warned that lenders could face a raft of new taxes if they fail to step up the amount of money they are offering businesses.

He admitted he has been disappointed with the lending levels he has seen so far, adding he would consider further reneging on the agreement - known as Project Merlin - to be a personal betrayal.

Speaking to a Commons liaison committee, Mr Cameron said: "Project Merlin was very much my initiative. It was a deal, it was an agreement. They have to meet their side of the agreement or we don't have to meet ours."

He added banks should strive to end what could become an enduring battle between themselves and politicians.

Sky News recently reported that the five biggest banks in the UK - HSBC, Barclays, Royal Bank of Scotland, Santander UK and Lloyds Banking Group - failed to meet the £19 million lending aim of the project for the first quarter of 2011.

By Gary Cooper

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