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Bank of England set to widen quantitative easing program

The quantitative easing program currently being administered by the Bank of England could well be widened over the next few days as the authorities look to inject more capital into the commercial market. Despite the fact that £80 billion of a fund of £125 billion has already been spent acquiring assets and increasing liquidity in the market place, there has been little positive impact to date. So what is the Bank of England looking to do next?

It looks as though the Bank of England is considering two significant new programs which would allow UK firms to raise working capital against a variety of assets and deposits. The Bank of England appears ready to accept trade receivables, equipment leases and consumer credit card debt as assets in exchange for significant liquidity, on a short to medium term basis. While there is no doubt the Bank of England has highlighted a significant problem for many UK companies there are concerns about the possibility of accepting "risky" assets as collateral.

The Bank of England and the UK government are in a very difficult situation because the quantitative easing fund is quickly being eaten up by the UK financial sector and there will obviously be concerns, when the funds run dry, if nothing appears to have improved.

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