Osborne unveils £140bn scheme to kick-start stagnant economy

[Fittster]

"The Bank of England is to offer money to high-street banks to kick-start mortgage and small business lending to prevent loans being rationed for many families and entrepreneurs, the Chancellor announced.
It comes after sharp rises in the costs of mortgages and other loans in recent months as banks struggle to raise money in the midst of the single currency crisis.

Sir Mervyn King, the Bank of England Governor, said that the “industrialised world have thrown everything bar the kitchen sink” at the global economic meltdown but that even “bolder action” was now required."

http://www.telegraph.co.uk/finance/financialcrisis...

So a good idea?

There wasn't much support for growth earlier

[Fittster]

Will giving the Banks more money to lend if SME's aren't interested in borrowing?

"The British economy will stall this year and will not fully recover until UK businesses stop "stashing the cash" and start investing again, leading economists have warned.

The Ernst & Young ITEM Club will say in a report out on Monday that growth will be just 0.4pc this year, half the 0.8pc rate forecast by the UK's official forecasting body, the Office for Budget Responsibility.

...

ITEM said that business investment grew by just 1.2pc last year, despite a corporate cash pile now worth more than £754bn, or 50pc of gross domestic product.
"Business investment has picked up nicely in the US but UK companies remain extremely risk averse, which is sapping strength from the economy," said Peter Spencer, chief economic adviser to ITEM which uses the Treasury model to calculate its forecasts"

source