Davies says lending not hurting UK

TRADE minister Mervyn Davies has poured cold water on Bank of England deputy governor Paul Tucker&rsquo;s suggestion that UK banks are hampering economic recovery.<br /><br />Speaking at the Paris air show, the former chairman of Standard Chartered admitted that encouraging banks to lend through the economic downturn was &ldquo;challenging&rdquo;.<br /><br />But when asked whether the lack of bank lending was impeding the recovery process, he said: &ldquo;I don&rsquo;t think its holding back the economy&rdquo;<br /><br />His comments clashed with Tucker&rsquo;s suggestion at the Association of British Insurers (ABI) conference last week that &ldquo;subdued&rdquo; lending could lead to a recovery that would be &ldquo;anaemic at best&rdquo;.<br /><br />Davies was appointed trade minister in January after Gordon Brown issued a distress call asking him to help the government deal with the banking crisis.<br /><br />He has been working with the government on measures to address the banking crisis since last year and was previously a member of the Business Council of Britain.