Mortgage rates set for fall, Bank of England survey shows The Government's Funding for Lending scheme, launched last August to give lenders access to cheap finance, was cited by many as a factor pushing down on bank funding costs and helping to reduce interest rates for customers. Since then, the Chancellor has used the Budget to offer further stimulus to the housing market, under the banner Help to Buy. Overall, lenders said the amount of credit made available to the households and businesses had grown in the first quarter of this year. The costs of borrowing also fell for businesses, with small firms seeing the first drop in interest rates since they began to be surveyed on that point at the end of 2009. But while lending to firms did increase in the first three months of the year, this was "confined to large companies." Banks reported that demand for credit among small and medium-sized companies had fallen over that quarter. "Lenders commented that confidence in the economic outlook remained fragile, and that was weighing on demand," the Bank survey said. A few lenders noted that some companies might have been discouraged from applying for credit because of a belief that lenders have a low appetite for risk. None the less, banks did not expect to increase lending to firms in the coming quarter despite anticipating rising demand. The findings appeared to undermine bankers" claims that their failure to grow credit as hoped is down to businesses" lack of enthusiasm to borrow. "SMEs continue to be left out in the cold by lenders," said Adam Marshall, policy director at the British Chambers of Commerce. While we welcome the Government's recent publication of a timetable for the long-awaited Business Bank, we believe that the scale and scope of the new institution must be increased so that it can significantly improve the business access to finance environment. The Chancellor last month told MPs that the state of the banks - still "deleveraging after the explosion of their balance sheets" - remained one of the "most acute" problems facing the UK economy.