The Bank of England said that the early signs from its `Funding for Lending' scheme for offering cheaper credit have been encouraging signs and that the scheme has worked as per expectations so far.

The Bank of England said in an article in its Quarterly Bulletin that there are expected to be significant time lags since the scheme begins impact the economy. The bank said that the scheme is helping reduce the cost of bank funding and this helps in mortgage approvals and aid the economy.

It expects easily access to credit to help boost and investment by households and businesses in the country. It expects the increased consumption to lead to higher incomes for the people in the UK and boost economic growth. The Funding for Lending Scheme was launched on 1 August, 2012 with an aim to improve the flow of credit. The article noted that the lending rates across the UK have fallen since the beginning of the scheme.

Rohan Churm and Amar Radia of the Monetary Assessment and Strategy Division, Jeremy Leake of the Financial Institutions Division, Sylaja Srinivasan of the Statistics and Regulatory Data Division and Richard Whisker of the Sterling Markets Division had written the article related to the scheme.