Britain to unveil 'business bank'

London - British business minister Vince Cable will launch plans on Monday to inject £1bn into a new "business bank" in a bid to cut borrowing costs for firms.

Cable will announce the initiative at the annual conference of junior coalition partners the Liberal Democrats.

"We need a British business bank with a clean balance sheet and a mandate to expand lending rapidly and we are now going to get it," Lib Dem minister Cable will say at the conference in Brighton on the coast of southeast England.

"Alongside the private sector, the bank will get the market lending to manufacturers, exporters and growth companies that so desperately need support."

Cable will say that the new wholesale bank will open up about £10bn of finance for small and medium sized British companies that are struggling to get access to credit.

The new bank will lend the cash via existing financial instutitions and start within 12-18 months. It will be funded from existing budgets and not require any additional state borrowing.

The Conservative-lead government hopes that it will attract more than £1bn of capital from the private sector.

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