Chancellor George Osborne is expected to announce an extension of a scheme designed to give small and medium-sized business greater access to finance.
The Funding for Lending Scheme was launched last year and was originally scheduled to end next January. Now reports suggest the £80 billion fund will be expanded in response to pressure from the International Monetary Fund over the depth of austerity measures in the UK.
It is thought that an announcement on the scheme’s extension will come before the IMF arrives in the UK in early May for talks.
The FLS scheme provides banks with cheap loans on the basis the cash is passed on to businesses, but figures suggest lending fell in the second half of 2012 compared with the first six months before it was introduced.
As well as an extension to the fund, it is also expected that government will detail what more it can do to encourage banks to increase lending.
By increasing businesses access to finance the FLS aims to boost the economy, first quarter figures for which are due to be released by the Office for National Statistics on Thursday.
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