HSBC announces £1bn fund for UK small firms

HSBC has created a new £3.4bn working capital fund for small and medium sized businesses, with £1bn allocated to UK customers.

Britain's biggest bank has stated that the money will be made available to ensure that "fundamentally sound," small firms continue to have access to credit during the current economic crisis.

"SMEs are the lifeblood of most economies and it is their success that will create economic growth," said HSBC chief executive Michael Geoghegan.

HSBC's announcement comes less than 24 hours before the major banks have another scheduled meeting with businesses secretary Lord Mandelson to discuss, among other matters, bank lending policies.

UK banks are facing growing pressure to increase their lending to small firms and to pass on rate cuts by the Bank of England in full.