December 1, 2016 / 10:15 AM / a year ago

Bank of England says new Term Funding Scheme sees little uptake in Q3

LONDON, Dec 1 (Reuters) - A new Bank of England programme designed to make lenders pass on the Base interest Rate cut to households saw little uptake in the third quarter, Bank of England data showed, with only one lender borrowing from it.

Aldermore bank drew 70 million pounds ($88 million)from the scheme, the data showed.

The Bank of England launched the Term Funding Scheme to provide four-year funding for banks at interest rates close to the Bank Rate in August amid concerns they may not pass on the cut because it would eat into their profits.

Under the terms of the scheme, banks can initially borrow up to 5 percent of their outstanding lending to UK businesses and households and will be able to access the lowest cost of funding if they maintain or expand net lending to the real economy.

Uptake of the separate funding for lending scheme, designed to encourage banks to make more credit available to households and businesses, rose to 60.8 billion pounds at the end of September, the Bank said. ($1 = 0.7977 pounds) (Reporting By Lawrence White and Andrew MacAskill; Editing by Susan Fenton)

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