UK bank and business lobbies lashed out yesterday at proposals to segregate banks' retail activities, saying they could damage the weak economy, as the industry and politicians brace for a September 12 report from the Independent Commission on Banking that is expected to bring dramatic changes to the sector.

John Grout, policy and technical director at the Association for Corporate Treasurers, said companies are concerned about their long-term access to loans if banks' costs rise, at a time when they are already nervous about the economy and sitting on cash rather than making investments.