Banks sign up to FLS, buoying share prices

<p>Investor confidence has been buoyed on news banks are participating in Funding for Lending.</p>

It has been revealed that five of the UK's major lenders are participating in the Treasury and the Bank of England's (BoE) Funding for Lending Scheme (FLS), which has buoyed investor confidence in the sector.

Designed to stimulate the economy by making cheaper loans available to first-time buyers and small businesses, FLS gives banks and building societies that sign up to the initiative access to better-than-market-rate funds.

The BoE, which manages the scheme, said 13 banks and building societies have signed up so far, representing 73 per cent of the market and £1.2 trillion worth of lending.

But although five of the biggest lenders are involved, only six of the UK's 47 building societies are participating so far, however the Building Societies Association believes this number will increase.

At 15:25 BST on the London Stock Exchange, participating banks Lloyds and Barclays saw their share prices rise by 0.7 per cent to 40.39p and 1.4 per cent to 223.40p respectively.

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