Osborne’s £140 billion kick-start – will it stimulate small business growth?

This week, the Chancellor of the Exchequer, George Osborne, announced a £140 billion emergency scheme in order to try to avoid a second credit crunch.  Backed by the Treasury, the Bank of England is to offer money to high street banks to kick-start mortgage and small business lending.  As the Chancellor says, this funding is for “the business that wants to expand”.

The funding for lending scheme will allow banks to ‘swap’ assets with the Bank of England in return for money that can be loaned out to small businesses and other customers.  In addition to this funding for lending scheme, the Bank of England will inject a minimum of £5 billion a month into financial institutions to improve their liquidity.

With further details eagerly anticipated, some are worried about how the scheme will actually work.  However, in the current climate where credit can be hard to come by, this seems like a step in the right direction.

Courtley West