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Carney to ‘significantly’ extend Funding for Lending – ING

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  • 17/04/2013
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Carney to ‘significantly’ extend Funding for Lending – ING
Incoming Bank of England governor Mark Carney will ramp up the Funding for Lending Scheme when he takes up his new role in June, according to ING Direct's senior economist James Knightley.

He told the myhomemove conference at the Heritage Motor Centre in Leamington Spa that the market could expect the expansion of the lending programme under Carney’s leadership.

However, Knightley said: “At the moment they are offering the banks £80bn to lend to customers. I think that could well be upped quite significantly under Mark Carney.”

“He has seen the effect of the FLS and he has talked openly about the need to really offer more and give it a big push.”

Minutes from the Monetary Policy Committee released today also show that the central bank panel ‘saw merit’ in boosting the FLS further.

Knightley predicted that two-year fixed rate products will continue to trend towards an average of 2% and that the new governor will take notice of the positive effects of the FLS.

“I think Mark Carney is going to be very proactive, very aggressive.

“He’s going to be doing more Funding for Lending, really boosting that scheme. This will see greater credit availability and will really drive down mortgage rates.”

He later added that the new governor would likely make an announcement on when the market could expect a Base Rate increase soon after he takes up his new role, something Carney has already done in his role as head of the Bank of Canada.

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