The British Government and Bank of England plan co-ordinated action to boost lending to households and businesses by providing funds to the banking sector at below-market interest rates, it emerged last night.
This major policy initiative, in which funding provision will be linked to banks' performance in sustaining or expanding lending amid "heightened uncertainty", was revealed by Chancellor George Osborne and Bank of England Governor Sir Mervyn King in speeches to the City of London at Mansion House. Sir Mervyn said it could be in place "within a few weeks".
Mr Osborne meanwhile signalled the Government was edging itself towards a Plan B by announcing a forthcoming boost to investment in Britain's infrastructure.
He also warned the eurozone woes could "still get worse before they get better" and again indicated if the UK did not get the "right safeguards" it needed to protect its interests as the eurozone integrated further, then voters might be given a say in a future referendum on EU membership.
Read more: Bank and Government unveil joint lending plan | Herald Scotland
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