Last week we asked whether the extension of the Funding for Lending scheme by the Bank of England was a case of excessive spin.
This week the BoE seems to be reverting to realism. The Telegraph business pages today (May 2) quote Paul Tucker, the Bank’s deputy governor for financial stability, as saying that the revised FLS scheme was not a “silver bullet”.
However, ever the optimist, Mr Tucker is still expecting FLS Mark 2 to have some effect on lending to SMEs within six months and arguing that there was reason to hope that the economy was on the mend.
Perhaps the worthy gentlemen at the BoE should get out more – and talk to the SMEs on the ground.
We are hearing nothing from SMEs to suggest that they are any more confident about borrowing and they remain focused on paying down existing debt and managing cash flow.
We remain underwhelmed about the potential for FLS to stimulate growth any time soon.