U.K. banks' reduced their lending to firms and households in the fourth quarter dampening hopes that the lending scheme will boost recovery, data from the Bank of England showed Monday.
The net lending of banks participating in the Funding for Lending Scheme, shrank GBP 2.4 billion during the quarter ending December.
About 11 participants made total FLS drawdowns of GBP 9.5 billion, taking the total amount drawn to GBP 13.8 billion since the programme started in August.
The BoE said it will take time for the FLS to boost lending volumes, given the the lags involved in the loan application, approval and drawdown process.
"I would not expect to see a return to rising aggregate quantities until we start getting data for 2013 at the earliest," Paul Fisher, Executive Director for Markets at the Bank of England said.
by RTT Staff Writer
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