Designed to get banks to lend more, chancellor George Osborne's Funding for Lending Scheme has failed to actually boost lending. Engineered to boost business lending, it's actually had more of an impact in the mortgage lending sector.
This chart from the Bank of England demonstrates quite how poor the measure has been, and in July the Trends in Lending survey showed a £4.5bn fall in net lending to businesses in the three months to May.
Howard Archer, chief UK and European economist, IHS Global Insight:
This suggests that the Funding for Lending Scheme (FLS) continues to have very limited impact in supporting bank lending to companies.
In contrast to business lending, the mortgage market has clearly benefited from improved conditions supported by the Funding for Lending Scheme while it is also now being increasingly helped by the first stage of the government’s Help to Buy initiative which started in April.