The findings of the Bank of England’s latest regional report may come as no shock to many as it found that bank loans became harder to secure last month with some lenders admitting that the construction, consumer services and property sectors were “essentially closed to new lending”.

Small and large companies reported that credit conditions had tightened further with banks demanding security for all facilities and increasingly reluctant to provide overdrafts.

Those lenders still prepared to extend credit to firms operating in construction, consumer services and property only did so on reduced loan to value ratios and by charging higher arrangement fees.

The Bank’s regional agents said the financing issues were set against a backdrop of weakening business investment and employment.

Retailers reported “little sign of any underlying improvement in consumer confidence”, with some warning that shoppers had come to expect that goods would be discounted.

Business services and manufacturing output continued to grow but at a slower pace. Construction contracted but the decline has moderated, they added.

“[Manufacturers] were increasing output tended to be those supplying essential goods, or in supply chains for the export sector, for instance in food production and hi-tech industries,” the agents said. “But there was particular weakness from suppliers of goods destined for the domestic household and construction sectors.”