Earlier this year, the governor of the Bank of England, Sir Mervyn King launched an £80 million “Funding for Lending” scheme, which is designed to encourage banks to lend to businesses and individuals. However, latest figures suggest that this may not be happening as much as required.
According to the latest figures from the Bank of England, lending to businesses shrank by over £2 billion in August; whilst separate figures provided by the Council of Mortgage Lenders has revealed disappointing loan figures for September, with gross mortgage lending down ten percent on the previous month, and fifteen percent lower than a year earlier, at £11.6 billion.
The latest batch of figures from the Bank of England and the Council of Mortgages Lenders underline the urgency of Sir Mervyn King to boost lending via the Funding for Lending scheme; although the minutes of the recent Bank of England policy meeting has shown that the scheme would take longer to have an impact on business lending – although the Monetary Policy Committee are said to be encouraged by early signs of lower mortgage rates.
Following the release of the lending figures, a spokesperson for the British Chamber of Commerce’s policy director, said: “These numbers reflect underlying uncertainty across the economy.
“However, they also suggest that the banking sector is continuing to deleverage, that the cost of credit has not come down despite repeated interventions, and that there are still many businesses out there who say they cannot access the credit they need.”
If your business is one of those who is struggling to receive loans, or if you would like to discuss financial solutions for your business’ needs, the experienced team of accountants at Milsted Langdon are on hand to offer advice, support and guidance, including advice surrounding how to get the most out of your investments.
Milsted Langdon Director, Peter Groves, specialises in strategic business and tax planning, services for high net worth individuals and professionals.