Motor and retail finance and leasing could be
included in 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.

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A spokesperson for the Treasury told
sister-publication Leasing Life while details of the
scheme were yet to be 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.

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.

The programme was described by King as being
in tandem with quantitative easing, which the BoE announced it
would not increase at its monthly policy meeting the previous
week.

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George Osborne described the current crisis as
perhaps the most difficult faced outside 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.”

grant.collinson@vrlfinancialnews.com