Asset finance and leasing could be included
the latest credit easing initiative launched by UK Chancellor
George Osborne.
Speaking alongside the Governor of the Bank of
England, Sir Mervyn King, Osborne announced a further credit scheme
in reaction to the continuing European “debt storm” at the annual
Lord Mayor’s Mansion House dinner on 14 June.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Through the “funding for lending” scheme, a
joint programme between the Treasury and the BoE, the UK’s central
bank will make funding available to banks in the form of loans lent
below market value.
Similar to the National Loan Guarantee Scheme (NLGS) launched
by the Chancellor in his March Budget, the discount loans will be
given on the condition the reduced rate is passed on to
businesses.
A spokesperson for the Treasury told
Leasing Life, while details of scheme were yet to
finalised, the programme would be open to all kinds of lending to
the real economy so long as the discount is passed on to
businesses.
The Finance and Leasing Association (FLA)
welcomed the news leasing could be included in the proposal and
said they will continue to work with the government to ensure asset
finance was well represented.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataJulian Rose, head of asset finance at the FLA,
said: “It is important that the Government’s credit easing
programme takes account of the diversity of the lending markets,
which means that it needs to work for leasing as well as
traditional bank finance, and it needs to work through both banks
and non-banks.
“We are calling for the funding for lending
scheme to include leasing and to permit block funding of the
non-bank channel.”
The programme was described by King as being
in tandem with quantitative easing which the BoE announced it would
not be increasing at its monthly policy meeting the previous
week.
George Osborne described the current crisis
as perhaps the most difficult faced outside of war time and
said “things could still get worse before they get better.”
The latest plan, he said, was designed “to
inject new confidence into our financial system and support the
flow of credit to where it is needed in the real economy.”
