What the papers say – 16th – 17th June 2012

The new ‘Funding for Lending’ scheme recently announced by George Osborne was the talk of the financial press this weekend, with industry experts both welcoming the move and questioning the impact it will ultimately have. Some brokers suggested in the Times that the plan to inject up to £140bn into the market could result in lower mortgage rates and more borrowers being successful in their loan applications, but others in the Mail on Sunday and Sunday Times expressed doubts over whether the additional funding will stimulate the market or not. Lenders remain nervous about extending their lending amid the uncertainty surrounding the eurozone and are trying to control the amount of business they do by increasing rates, so how many take advantage of this scheme remains to be seen. The Financial Times reported that lenders including Barclays, Halifax and Santander have been improving their deals available for borrowers who have their main current account with the bank, and last week NatWest also launched new loyalty deals. Brokers warned however against switching accounts just to have access to these deals, as most have terms stating how long the account must be in place, and will require that it is used as the main active account. In protection news, the Mail on Sunday looked at the impact of the new Gender Directive on the cost of insurance. The Association of British Insurers expects life and critical illness costs to rise by up to 20% for women, and experts urged consumers to review their protection needs now. The new rules come into force on 21st December this year.

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