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Bank of England is swamped by interest from financial institutions

As the first £2 billion of the quantitative easing budget poured into the gilts market yesterday the Bank of England was hit by a deluge of interest with £10.5 billion worth of gilts offered from a variety of banking institutions in the UK. While the £2 billion injected into the market yesterday is but a fraction of the £150 billion which is rumoured to be available in the short to medium term it would appear that UK banks and financial institutions are literally falling over themselves in the scramble for extra liquidity.

After months and months of speculation, denials and rumours it seems as though quantitative easing has begun in what many believe is the last phase of a potential rescue package for the UK economy. If quantitative easing fails this would almost certainly see the UK economy plunge into a deep depression which would massively overshadow the downturn to date.

Opinion is split as to whether quantitative easing is the way forward but in many ways the UK authorities have no other options available and the fact that there has been significant interest so far bodes well for the future. This should ensure that significant extra liquidity is injected straight into the economy and hopefully straight into the consumer market.

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