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Funding for Lending three times higher in third quarter | Funding for Lending three times higher in third quarter |
(about 2 hours later) | |
The Bank of England says lending by banks and building societies participating in its Funding for Lending (FLS) scheme was three times higher in the third quarter. | The Bank of England says lending by banks and building societies participating in its Funding for Lending (FLS) scheme was three times higher in the third quarter. |
The Bank said that lending bodies had taken £5.8bn under the scheme in the three months to the end of September. | The Bank said that lending bodies had taken £5.8bn under the scheme in the three months to the end of September. |
Banks have taken £23.1bn of cheap funds from the FLS. | Banks have taken £23.1bn of cheap funds from the FLS. |
The scheme was launched more than a year ago, in an attempt to boost lending and get the economy growing. | The scheme was launched more than a year ago, in an attempt to boost lending and get the economy growing. |
The biggest net lenders were Lloyds Banking Group and Nationwide, but net lending fell at Santander, Barclays and the Co-operative Bank. | The biggest net lenders were Lloyds Banking Group and Nationwide, but net lending fell at Santander, Barclays and the Co-operative Bank. |
'Recovery' | |
Under the scheme, banks and building societies are allowed to borrow money cheaply from the Bank of England, as long as they then loan that money to individuals or businesses. | Under the scheme, banks and building societies are allowed to borrow money cheaply from the Bank of England, as long as they then loan that money to individuals or businesses. |
Last week, that was modified to exclude individuals, as the Bank believed mortgage lending had picked up sufficiently and no longer needed special support. | Last week, that was modified to exclude individuals, as the Bank believed mortgage lending had picked up sufficiently and no longer needed special support. |
Paul Fisher, the Bank's executive director for markets, hailed the figures: "An economic recovery has taken hold. These data show that a significant improvement in credit conditions, aided by the FLS, is now feeding through to lending." | |
The business lobby group, the CBI, said the lending figures were not as good as they looked. | |
Matthew Fell, the CBI's director for competitive markets, said: "Despite overall FLS lending substantially increasing, Bank of England data shows that net lending to SMEs [small and medium-sized enterprises] continues to fall, so the recent move recalibrating the scheme towards business lending is welcome." |
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