UK government to extend Funding for Lending scheme

23 April 2013

UK chancellor George Osborne is expected to announce an increase in lending to small businesses after facing mounting pressure from the IMF over his austerity policies.

The boost in funding will come from an extension in the Bank of England's Funding for Lending scheme, which is expected to happen in the coming weeks.

The scheme is designed to increase lending to small businesses and households by providing banks with cheap loans that must be passed on to customers.

It was launched in August and was due to expire in January 2014.

The IMF recently put pressure on the UK government to reconsider the pace of the austerity measures in order to stimulate growth.

Fitch Ratings recently became the second of the big three rating agencies to strip the UK of its triple-A status.

Since coming to power in May 2010, the coalition government has introduced austerity measures to reduce the deficit. However, weak growth has frustrated its economic plans and it is now under pressure to slow the speed of the measures.

By Claire Archer

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