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Funding for lending programme

The Funding for Lending Programme (FLP) is one of the monetary policy tools we are using to maintain low and stable inflation and support full employment.

How it works

The FLP works by lowering interest rates and encouraging households and businesses to spend and invest.

The programme allows eligible banks to borrow directly from us at the official cash rate (OCR). The borrowing rate will adjust over the term of the transaction if the OCR changes, whether up or down.

As banks will be less reliant on more expensive deposits and wholesale borrowing, the programme lowers their overall funding costs. Banks can then pass these reductions on to their customers through lower mortgage and business lending rates.

How long it will run

The programme started on 7 December 2020 and will run until 6 June 2022 for the initial allocations, and until 6 December 2022 for the additional allocations.

More information

The total volume of funds lent under the FLP is published on the influences on settlement cash and standing facilities statistic pages.

Influences on settlement cash – D10

Standing facilities – D12 tables

Read the Funding for Lending Programme terms (PDF 294KB)

Read our Bulletin article about the additional monetary policy toolkit – RAMPed up