Five of Britain’s leading banks have committed to lending a combined £11 billion to support UK firms investing and expanding into new international markets, according to a government announcement on Monday. The initiative involves NatWest, HSBC, Barclays, Lloyds, and Santander. It aims to stimulate growth in Britain’s economy.
The announcement comes as the Labour Party seeks strategies to boost the UK’s economy and follows recent encouragement from the Bank of England for commercial banks to increase lending. Business and trade minister Peter Kyle stated that strengthening Britain’s export potential depends on businesses having the resources and opportunities to succeed in overseas markets.
The lending capacity will be immediately available and funded entirely from the banks’ existing balance sheets. UK Export Finance, the government’s export credit agency, will guarantee up to 80% of eligible loans issued by each bank. This guarantee is designed to encourage banks to offer loans to businesses that might otherwise be considered too risky.
While the commitment is significant, there is no guarantee that the banks will lend the full amount pledged. Firms will still need to ensure that any borrowed funds are used commercially and can be repaid. The initiative hopes to boost export led economic growth by giving businesses access to greater investment capacity.
