Funding for lending could increase loans by 5%, says Fisher

Wednesday 18th July 2012

Bank of England executive director Paul Fisher has predicted that the Government’s funding for lending scheme would increase lending by 5%.

He said that would be a ‘considerable improvement’ after flat lending growth over the last three years.

Speaking to MPs yesterday, he said: “If we got lending growth of 5% over the next 18-month period, that would equate to around £80bn. I would grab that now as an outcome of the scheme.”

Almost 100 institutions are eligible for the scheme, which is intended to boost lending to businesses as well as mortgage lending.

Barclays, Lloyds Banking Group, Royal Bank of Scotland and Nationwide Building Society have so far all confirmed they will take part.

HSBC has ruled it out, saying it will continue to fund its lending largely through retail deposits.