The Bank of England’s monthly figures on money supply have revealed that lending to private firms declined by £4.7 billion between March and April this year.

The drop of 0.9% in M4 lending (mainly consisting of loans and overdrafts) marks the largest monthly decrease since figures began in 1997.

These figures will add to growing doubts that the Bank’s unprecedented £125 billion quantitative easing programme is failing to increase money supply and free up credit to businesses and individuals.

However, in terms of mortgage lending, there was some positive news. 43,201 home loans were approved during the month of April, which was slightly up from the 40,038 approved in March and the highest level since May 2008.

Although the numbers are still dwindling far below the 75,000-plus levels of pre-credit crunch days, Paul Samter, economist at the Council of Mortgage Lenders, said that May approvals would almost inevitably be higher than a year ago, for the first time since the beginning of 2007 – but added that “activity remains extremely low.”