A scheme aimed at boosting credit to households and businesses has so far failed to get banks and building societies to lend more, new figures show.
The Bank of England said net lending in the quarter to December 31 fell by £2.4 billion on the previous quarter, despite participants of the Bank of England's Funding for Lending Scheme (FLS) drawing down another £9.5bn over the period.
The Bank said it expected credit conditions to improve over the course of the year, and pointed out that net lending increased by £3.1bn in January.
At Westminster, the Treasury and No 10 sought to downplay the fall-off in lending to businesses at the end of last year, stressing that lending for January this year had seen a jump of more than £3bn.
However, Labour seized on the "deeply disappointing" numbers, which showed a fall of £2.4bn in the fourth quarter of 2012.
"Businesses are losing patience with this Government," declared Shadow Chancellor Ed Balls.
"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."
Stewart Hosie for the SNP said the Treasury was failing to boost the economyand the best way forward was for Scotland to have the full economic powers of an independent country.
A Treasury spokesman stressed the four quarter was typically weak for lending and that when the FLS was set up in August it was emphasised that it would take some time for it to get up and running.
He added:"The improvement of £3.1bn for January is evidence we are moving in the right direction."
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