XE.com - New finance for medium firms key to UK growth -CBI

By Olesya Dmitracova

LONDON, Oct 24 (Reuters) - Improving medium-sized firms' access to venture capital and bond markets would help fuel Britain's economic growth, the Confederation of British Industry said on Monday.

Allowing these businesses to grow faster could add 0.1-0.26 percent to Britain's annual rate of economic growth by 2020, the CBI said in a report which touches on a problem that has recently fallen under the political spotlight.

Finance minister George Osborne, focused on cutting a large budget deficit, is under pressure to improve Britain's rate of growth, which was minimal over the past year and is forecast to be very weak in 2012.

With that aim in mind, the government has set targets for banks on lending to businesses, but has since consistently criticised them for not lending enough.

CBI Director-General John Cridland agreed that a lack of finance is a major barrier for British firms with a turnover of between 10 million and 100 million pounds.

'In many ways that's the most critical ingredient...to make sure that the financial support options do help that growth to be achieved,' he told a media briefing held in a smart central London wine bar, part of a chain owned by brewers Adnams which the CBI had identified as a successful medium-sized business.

Medium-sized businesses generate 22 percent of economic revenue and 16 percent of all jobs in Britain, according to the CBI.

As bank lending is constrained, the CBI says it wants the government to help such firms issue bonds backed by public money, encourage venture capital and dilution of ownership, and make it easier for large companies to invest in smaller ones.

As an example of this, the CBI invited Ceres Power, which makes alternative energy devices for use in homes, to the briefing. The firm's commercial director, Bob Flint, said that the company's search for funding led to a deal with Centrica's British Gas, Britain's largest energy supplier, which has invested more than 20 million pounds in the firm.

(Reporting by Olesya Dmitracova; editing by Ron Askew) Keywords: BRITAIN COMPANIES/FINANCE

(olesya.dmitracova@thomsonreuters.com)(+44 20 7542 8051)(Reuters Messaging: olesya.dmitracova.thomsonreuters.com@reuters.net)

COPYRIGHT

Copyright Thomson Reuters 2011. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

Source: http://www.xe.com/news/2011/10/23/2233865.htm?utm_source=RSS&utm_medium=TL&utm_content=NOGEO&utm_campaign=News_RSS_Art6

demarco murray ed reed teresa giudice red ribbon week much ado about nothing sean hayes ndamukong suh