UK Introduces Plans Of Bank Lending

13 July 2012 17:00 - Lucy Williams

    



UK Introduces Plans Of Bank Lending


Britain has released details of plans to lift the economy out of recession, recently announced by Chancellor George Osborne and Bank of Englandís Mervyn King. The scheme aims to offer cheap funding to banks that agree to loan sums of money to households and small businesses. The scheme is considered to be able to increase much needed credit supply to the UK economy.

The Bank of England announced the Ďfunding for lendingí plan will begin in August and hopes to guarantee that the UK economy is protected from the ongoing eurozone debt crisis. The scheme was welcomed by UK banks however it was recognised that demand for borrowing by their lenders must improve if the lending scheme is to be successful.

For the plan to benefit the UK economy Britainís top banks and small business must commit to borrowing and lending. Due to the current economic situation in the UK, and indeed Europe, banks may still feel unwilling to lend money as the risks may be considered too high. Previous attempts at boosting the economic recovery such as creating government lending targets were met with limited success.

The UK economy continues to struggle and shows few signs of any impending recovery. The funding for lending scheme follows the Bank of Englandís recent announcement to begin further quantitative easing.

George Osborne was quoted as saying that the plan ďaims to make mortgages and loans cheaper and more easily available, providing welcome support to businesses that want to expand and families aspiring to own their own homeĒ.

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Related Links :
Bank Of England - Official Website
World Economic Events Calender - Scheduled Economic Events

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