TAXPAYER-backed Lloyds Banking Group pledged to slash rates for borrowers after drawing down another £2bn from the Bank of England’s lending scheme.

The bank said it had now withdrawn £3bn from the Funding for Lending Scheme, which was launched in August by the Bank and the Treasury to help ease the flow of credit to businesses and consumers.

Recent figures from the Bank revealed that Lloyds cut its overall net lending between June and the end of September by £2.8bn, despite withdrawing £1bn from the FLS scheme during the period.

But Lloyds said it had increased net lending to small businesses by 4% over 2012.