Monday, 03 December 2012 17:26
LONDON: British banks and building societies drew down 4.36 billion pounds ($7.0 billion) from a Bank of England programme to boost lending in its first two months, in what analysts said was a moderately encouraging start.
Net lending by the banks involved rose by only 496 million pounds, but the BoE's executive director for markets, Paul Fisher, said it was too early to use Monday's data as a guide to the scheme's success - a view largely shared by economists.
The Funding for Lending Scheme, which opened at the start of August, offers banks cheap finance if they in turn lend on to households and businesses, and is aimed to boost the economy in ways that the BoE's 375 billion pounds of quantitative easing bond purchases has failed to.
"Quite whether it kick starts the chain reaction that is required to get the economy going is less clear. Nonetheless, it is a case ...