Evidence that the credit squeeze will hurt the UK economy emerged on Wednesday when a Bank of England survey showed companies were likely to be hit hard by higher borrowing costs. This was followed by a warning from Barratt Developments, a leading UK housebuilder, about plummeting sales in the wake of the Northern Rock crisis. The news came as recriminations over the handling of Northern Rock continued with Richard Lambert, director-general of the CBI employers’ organisation, blasting the Bank, the government and the FSA in a speech on Wednesday night. He said the tripartite system had “been found wanting under fire”, creating scenes on Britain’s streets that should occur only in a “banana republic”.
