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Chancellor George Osborne has revealed a new stimulus plan worth £100 billion aimed at helping banks increase mortgage and small business lending. Speaking at his annual Mansion House address in the City of London, the Chancellor George Osborne unveiled two stimulus plans which he said would "deploy new firepower to defend our economy from the crisis on our doorstep."
Mr Osborne said the scheme will offer "lending to the family aspiring to own their own home" alongside loans for businesses looking to expand. The chancellor added said: "The Government - with the help of the Bank of England - will not stand on the sidelines and do nothing as the storm gathers. We are rolling up our sleeves and doing everything possible to protect British families and firms."
Treasury select committee chair Andrew Tyrie also showed support for the proposals, saying they look "very encouraging" He said: "These are exceptional circumstances. They require exceptional measures. The measures look as if they will encourage lending to businesses by ensuring liquidity is more easily available. It is not just welcome that the Treasury and the Bank of England are working together to secure recovery. It is essential."
The scheme will provide funding to banks for an extended period. The rates will be below current market rates and linked to the performance of banks in sustaining or expanding their lending to the UK non-financial sector.