Bank of England considers ways of improving loans market

30 June 2009

The Bank of England has finished a two-week consultation on plans to use more spending under its quantitative easing scheme to boost loans and other forms of credit to businesses, according to The Times.

The quantitative easing scheme was introduced to boost cash flow into banks and other financial institutions, thereby increasing the amount of money available for loans and mortgages.

However, government sources have noted `that Mr King [the Bank`s Governor] argued at Mansion House that boosting bank lending was not a chief aim of quantitative easing`.

Bank of England chief economist Spencer Dale said that the Bank was continuing "to review actively the case for extending its operations into other corporate credit markets". Mervyn King is expected to face questions on the issue by MPs today.

According to the BBA (British Banker`s Association), net borrowing by non-financial companies from banks increased by just £100 million in May - after it fell by £2.3 billion in April.

---

Think Money work with a panel of lenders to offer a range of loans. If you are thinking about getting a loan, contact one of our expert loan advisers today.

Tags: bank of england, loans, mortgages, quantitative easing scheme, quantitative easing, BBA

Our initial advice on your best financial solution is free. Fees payable when continuing service is provided. Calls may be recorded for training and quality purposes.