Chancellor of the Exchequer George Osborne said measures announced with the Bank of England today could cut the cost of private-sector loans for exporters by as much as a tenth of a percentage point.
The BOE said earlier that export credit notes guaranteed by U.K. Export Finance will be able to be used as collateral at the central bank. In his March 19 budget, Osborne doubled the trade promotion agency’s lending facility to 3 billion pounds ($5 billion) and cut interest rates on it by a third.
“Britain will no longer have some of the least competitive export finance in Europe,” Osborne said in a speech today in Rio de Janeiro. “We are going to have the most competitive export finance in Europe.”
Today’s announcement will reduce the risk for private-sector lenders to extend loans to exporters, Osborne said. It could reduce the cost of export finance by between 5 basis points and 10 basis points, according to the Treasury.
U.K. Trade and Investment will also triple the number of its advisers to help mid-sized British companies export, he said.
Speaking of his trip to the International Monetary Fund Spring meeting in Washington later this week, Osborne said finance ministers and central bank governors will assess the global economy and discuss the challenge of withdrawing stimulus put in place since the financial crisis.
“We should agree both that those monetary authorities like the Federal Reserve and the Bank of England should continue to communicate their exit plans clearly with forward guidance, but that emerging markets must also continue with their crucial structural reforms,” he said.