Step up lending, Darling tells banks

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The Chancellor told MPs he will meet heads of major banks to ensure they honour lending commitments given in return for state help.

"It is absolutely imperative in this country and others that banks see through past lending decisions," Darling said.

"We need to get credit flowing again. That will be the thing that helps drive the recovery, and I will certainly be raising that when I meet with the banks shortly."

Darling said there were signs the economy was recovering but risks remained, particularly from rising oil prices and weak growth overseas.

"Whilst there have been some encouraging signs, the problems relating to world trade are affecting exports," he added.