Bank's Fisher says borrowers and lenders must not over-stretch themselves

The Bank of England's Paul Fisher has said that while the Funding for Lending Scheme has been "remarkably successful", it is important that "both borrowers and lenders need to be careful not to over-stretch themselves."

Bank staff projections for net lending to the real economy, consistent with the MPC’s outlook for growth in the August Inflation Report and with recent improvements in indicators of credit conditions, suggest that overall credit growth is likely to pick up, becoming modestly positive overall during the second half of the year. This is also consistent with the collective views of the FLS participants.

On forward guidance Fisher clarified that it "is not a guarantee to hold rates where they are for a set period of time", but instead "allows us to explore how much spare capacity there really is in the economy before raising Bank Rate."