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Bank urged to provide more liquidity

Calls for the Bank of England to intervene more decisively to arrest the impact of the credit crisis are mounting following the revelation that UK lenders are not receiving the amount funding they are requesting. In a meeting with Mervyn King, the UK's five largest lenders asked for £30 billion to be made available in the Bank's weekly open market auction. However, the Bank has pledged just £13.6 billion - close to three times less than had been requested. News of the shortfall came as the Libor London inter-bank lending rate rose to 6.00375 per cent - significantly above the key base rate of interest of 5.25 per cent. Philip Shaw, an economist with Investec, told the Independent: "You would expect it [the Libor] to be a little lower than base rates because they are expected to fall over the next few months...against that background, the demand for funds from the Bank should come as no surprise."

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