Prime Minister David Cameron's spokesman has said the Government and the Bank had always made clear that it would take some time before the impact of the Funding for Lending scheme was felt, and that it was not expected as early as the fourth quarter of 2012.
But shadow chancellor Ed Balls said: "These are deeply disappointing figures. Net lending is actually down since the FLS started and down by £2.4bn in the final three months of 2012. And the Bank of England's own figures show that net lending to businesses fell by £4.5 billion in the last quarter.
"Businesses are losing patience with this Government. After nearly three years of failure, the Chancellor must explain what action he will take to finally boost net lending to small and medium-sized firms, which is vital if we are to get our economy moving."