FLS
to be expanded
George Osborne will announce an expansion of the £80bn funding for
lending scheme (FLS) ahead of a visit to Britain by the IMF next month, as he
seeks to head off calls for a softening of government austerity plans. High-street
banks are to be given added incentives to extend credit to SME's. The FT
reports that the scheme is yet to prove itself but that it is seen by policy
makers as more important than ever to economic recovery efforts, but the
expected announcement of an extension to the scheme will increase scrutiny of
how well it is working. Net lending contracted by £2.4bn in the fourth quarter
of 2012 according to BoE figures published last month, the first period where
any meaningful improvement owing to FLS would have been seen. The next set of quarterly
lending data, to be unveiled on June 3, will be vital in determining the
scheme's success or failure.
The Guardian, Page: 21 Financial Times, Page: 2
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