Funding for Lending Scheme

Fall in Lending to UK Businesses Slows Amid Signs of Recovery

Lending to UK businesses fell by £500m in the three months to February according to latest Bank of England figures – but leading economists insist the news is not all bad Despite easier credit conditions and increased assistance from the Bank of England and government to secure funding, the Trends on Lending report, published this week noted that “the annual rate of growth in the stock of lending remained negative”. It did, however, point a slowing down in the fall of lending, with net lending to small and mid-sized businesses – gross lending less repayments – close to zero in Q4 2013, having been negative for the same period a year before. And the fall was far less than the £3.3bn reported in the three months to November. The report also highlighted the rise of alternative sources of fina... »

Funding for Lending Scheme Launched

The Bank of England and HM Treasury have just announced their new Funding for Lending Scheme (FLS) to pump more money in to the UK economy. Where previous rounds of Quantitive Easy (QE) have failed to show the expected improvements in lending, the aim of the new FLS is to ensure money goes directly to the "real economy". The (initial) £80 billion scheme effectively makes more money available to banks and building societies, as with QE, but with the added incentive that eligible participants will be encouraged to build up sufficient collateral to support their future use of the scheme. In other words, if the instutions involved lend more they will be able to borrow more. In a joint press release the two stakeholders stated that: "…for every pound of additional rea... »