Wednesday, 26 September 2012


It was pleasing to see several building societies listed in yesterday's announcement of the early adopters in the Bank of England's Funding for Lending scheme. The FLS is designed to boost lending to small businesses and to UK households by providing lenders with a funding source below the current  level of retail savings rates.With mutuals such as Ipswich, Principality and of course Nationwide on board the range of organisational scale across our sector is better represented than may have been expected and I know a number of smaller societies,including The Hanley, are considering future involvement. Hopefully the FLS will revitalise SME and micro-business funding as I know, from speaking to many business contacts locally,there is a pressing need for this segment of our economy to get a jump-start on new initiatives. Similarly it will be important for FLS to assist potential new mortgage borrowers with modest deposits.It would be a pity if the FLS simply became the catalyst for a remortgage price-war on sub 60% LTV lending. Of course no government intervention in the lending market is  guaranteed to combat the prevailing frailty of consumer confidence . Consumers  are understandably concerned about the gloomy clouds over the eurozone and about the future impact of austerity measures here in the UK. Seems to me that is why all of us in financial services should welcome all sincere efforts to boost new business levels , whether it is FLS or indeed the current Mail on Sunday campaign to allow the full ISA allowance to be placed in a cash ISA. It's easy to find fault with virtually any attempt to get that jump-start but consumer confidence will only jolt forward when we are crunching through the gears .        

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