Encouraging banks to offer loans

The Government is considering ways of encouraging banks to increase the availability of loans.

Loans play an essential part in today’s world. As the BBC puts it: ‘The ability of businesses and homebuyers to obtain credit is seen as key to economic recovery’.

Indicating that injecting more cash into the banking system was not the “first port of call”, Chancellor Alistair Darling revealed that discussions would be held about different ways of making loans more available.

Analysts are currently speculating about the different approaches the Government could take to revitalise the loans markets. As The Telegraph reports, the Treasury could fully nationalise certain banks, for example, or even offer loans ‘directly to businesses and households through its nationalised institutions’.

This Thursday, the Bank of England’s Monetary Policy Committee (MPC) is widely expected to announce a cut of at least 0.5% to the base rate. According to Reuters, ‘Money markets are pricing in an 80 percent chance the Monetary Policy Committee will slice borrowing costs to 1.25 percent from the current 2 percent, taking the Bank rate to its lowest since it was founded in 1694’.

Whatever the MPC’s decision, there’s no way of knowing what impact this will have on loan markets.

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

Tags: loan, loans, getting a loan, banks, bank, bank of england, homebuyers, home, homeowner

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