Osborne to increase FLS

<p>The FLS is to be boosted by the chancellor.</p>

Chancellor George Osborne is set to announce a boost to the Funding for Lending Scheme (FLS).

The project, which was launched in conjunction with the government and the Bank of England last year, has not proven to be a success so far.

Data shows business lending has actually been falling since the introduction of the programme, but measures are set to be announced by Mr Osborne to reverse this trend.

The news comes amid pressure from the International Monetary Fund for Mr Osborne to reconsider the pace of his austerity programme. The body recently warned the chancellor his plan for the UK economy is not working and he ought to change tack.

It lowered its expectations of growth for 2013 to just 0.7 per cent for the UK, which is a drop from its previous forecast of a one per cent expansion of the economy this year.

Deputy prime minister Nick Clegg recently called for the FLS to be pumped up by the Treasury in order to improve the flow of credit to firms in need of finance.

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