Disappointing start for bank lending scheme

According to industry experts, the Bank of England’s ‘Funding for Lending Scheme’ (FLS) made a poor start in August as lending to businesses and households dropped by £5bn.

This steep fall in lending is in stark contrast to the average monthly £900m rise in lending over the past 6 months – however one-off factors such as the Olympics are likely to have had a significant impact.

Average interest rates on new savings in August decreased by 0.1%, as the cheap funding on offer gave banks less incentive to attract retail deposits. The average rate on loans to businesses marginally decreased to 2.66%.

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