Paul Tucker, the Deputy Governor of the Bank of England has said that the central bank’s new lending scheme is likely to help boost economic growth by helping in reducing interest rates for businesses in the UK.

He said that he is pleasantly surprised over the number of businesses and building societies that has signed up for the BoE's Funding for Lending Scheme (FLS) since it was launched in August this year. He was speaking at the banking conference in Tokyo organised by the Institute for International Finance.

“We observe the fall in funding costs that this has helped to bring about. I am reasonably confident this will be passed on to the real economy over time,” he said.

Officials believe that if the FLS is successful in bringing desired results then it would bring down the need to purchase government bonds under its quantitative easing scheme. Mr. Tucker admitted that there is weak demand for credit but pointed out that the government should address credit supply issues wherever required in order to increase the availability of credit in the economy.