The scheme was launched at the beginning of August and while it is still early days, the Bank says that early signs have been encouraging and that market funding costs for UK banks have fallen sharply, leading to a fall in many loan rates.
However, it also pointed out that, given the usual lags from credit being offered to loans being made, the scheme is unlikely to materially affect lending volumes until next year.
Many savers have also expressed concerns that one of the knock-on effects of the FLS has been to drive to the return on savings accounts, as with the cheap money available to them, banks and building societies are under less pressure to raise funds from the public.
In its bulletin, the Bank also discussed the effects of the various initiatives that it and the Government have launched since 2007 in a bid to boost economic growth.
Apart from the FLS, the Bank has kept its base rate at the record low of 0.5 per cent for nearly four years and has also pumped £375bn into the banking system via its policy of quantitative easing. Despite this, it says, output has been “broadly flat” over the past two years.
However, according to a survey by the Federation of Small Businesses, small firms are displaying “cautious optimism” because the FLS is starting to have an effect.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
[ add comment ] ( 3 views ) | permalink |
( 3 / 698 )
Random Entry
