Bank of England post-Brexit measures to boost lending by £150bn
The Bank of England (BoE) plans to soften rules for banks in the wake of the Brexit vote in a move that could see lending increase by as much as £150bn.
Revealed in the BoE’s Financial Stability Report, the changes are designed to mitigate the impact of financial market uncertainty on the UK’s economy caused by last month’s EU referendum.
The new measures, easing rules that have tightened in recent years following the last financial crisis, will cut the ‘capital buffers’ that banks must hold by £5.7bn until June 2017 at the latest, raising their capacity for lending to businesses and households across the UK by billions of pounds.
Mark Carney, governor of the BoE, said the UK is now in a period of “uncertainty and significant economic adjustment”, adding that the number of vulnerable households could rise because of a tougher economic outlook and potentially stricter lending conditions.
However according to Sky News, with the pound having slid to a 31-year low against the US dollar, Mr Carney said the BoE does not have the power to fully offset the market volatility caused by Brexit.
The future of wages, wealth and jobs in the UK, he said, would be determined by major decisions made by government officials and private firms.
He commented: “However, by promoting monetary and financial stability, the Bank of England can help facilitate these decisions, smooth the necessary economic adjustments and help UK households and businesses seize new opportunities.
“These efforts will mean we can all look ahead, not over our shoulders.”