Bank of England - New loan scheme

The Bank of England has released details of new loan schemes to banks and companies at the annual Mansion House speech on Thursday, against a backdrop of EU elections and deteriorating economic conditions in the region.

Rumours abound that this might be part of a larger coordinated strategy by the G20 nations, designed to lift confidence in the EU, with Greek elections taking place this Sunday and uncertainty as to whether they will remain in the EU and the Spanish credit rating recently downgraded, pushing the funding of Spanish Government borrowing to critical levels, at around 7%.

Mervyn King said that funds would be made available to banks, providing they pass the relatively cheap money to those that need funding.

Businesses are finding it difficult to borrow and consumers are struggling to get mortgages without having to stump up substantial percentages of it, something that is killing the first time buyer's market and having a knock on effect throughout the building industry. The current action by the Bank of England and the Government, is designed to provide direct assistance and funding to these areas, that will in turn promote faster and more substantial growth than is happening at the moment.