A day which is culturally foreseen as unlucky (especially if you’re a Knight’s Templar) has seen the government announce its next disasterous policy: “Funding for Lending”
For every £1 of additional lending made by a bank, it will be able to access an extra £1 of cheap funding from the scheme. Those that reduce lending will have to pay higher fees to use the scheme.
They will be able to borrow up to 5pc of their existing lending stock, which will be increased if they expand net lending over the next 18 months.
This economic crisis was created by cheap money and endless credit; you do not rescue the economy with more of the same. If anything, this is clandestine bailout scheme for the banking system. We are literally paying banks to lend to the wider economy; forgive me, but what has happened to the promise of sustainable growth?
“Funding for Lending” is a recipe for disaster.