The Centre for Economics and Business Research (CEBR) expect investment in businesses to decrease by 15%, causing real problems for the economy with firms struggling to access finance.
"Despite public declarations by the government that the banks ought to be lending more, it is clear the primary concern of many of our largest banks is to shore up their balance sheets," said CEBR managing economist Ben Read to the Daily Telegraph.
Mr Read added that if the decline in business investment coincides with a drop in consumer confidence and spending then, "a contraction of between 5% and 10% could be on the cards, setting the UK economy back by five years."