Britain announced Wednesday one year extension its Funding for Lending Scheme (FLS) in a bid to invigorate the stagnant economy.

The Bank of England, the central bank, and the Treasury said in a statement the extension of the scheme aims to give banks and society confidence and that funding for lending to the real economy will be available on reasonable terms until January 2015.

It will increase the incentive for banks to lend to small and medium-sized enterprises (SMEs) both this year and next, and to include lending involving certain non-bank providers of credit, which play an important role in providing finance to the real economy.

The FLS is launched in August last year and due to end in January 2014, designing to boost the economy as the government believed the scheme involving 80 billion pounds (122 billion U.S. dollars) is a huge help for the British economy.

The FLS has made mortgages and loans cheaper and more easily available, providing support to businesses that want to expand and families aspiring to own their home.

"The FLS has contributed to a sharp fall in bank funding costs and an improvement in credit conditions since the middle of last year," said Mervyn King, the Governor of the Bank of England.

"The changes announced today build on that success by broadening the scope of the scheme and ensuring that it will continue to support the supply of credit, especially to small companies, into 2015. I believe such an extension is valuable as it gives banks continued assurance against the risk that market funding rates increase."

The Chancellor of the Exchequer George Osborne said: "This is a big boost for the small and medium sized businesses that are at the heart of the British economy."

"This innovative extension will now do even more for small and medium sized businesses so that they can play their full part in creating new jobs." George added. Endi

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