Bank of England leads the attack on high street lenders
The Bank of England has today led the charge for high street lenders to release more funds to the consumer and corporate markets with a veiled threat to reduce the interest rate which UK banks receive on their funds held in central bank reserves. When you consider that between HSBC, Royal Bank of Scotland, Barclays, Lloyds bank and Northern Rock, there is over £157 billion held by the Bank of England, an increase from £90.6 billion at the end of 2008, the threat will be noted.
Currently UK clearing banks receive interest on their funds held in the central bank reserves although the Bank of England has today suggested that this interest rate may be cut to make it more attractive for UK clearing banks to lend money to consumers and businesses. This pincer movement, between the UK government and the Bank of England, may or may not have the desired effect of increasing liquidity in the loan market but it does show that the Bank of England is more than capable of acting under its own steam.
There is every chance that this veiled threat will have more of an impact on the UK lending market as there is no doubt that centuries of experience in the money markets has given the Bank of England a reputation which is unmatched around the world.
Share this..
Related stories
Bankruptcies and company failures set to soar in the UK
It has been revealed that bankruptcy petitions in UK have increased by 7% in the third quarter of 2008 compared with the same period in 2007. It was reported by the Ministry of Justice that 13,653 bankruptcy petitions were passed to courts in England in the third quarter of 2008 alone. Over the same period it has also been confirmed that 3,184 companies received winding-up petitions which went to...
Read MoreBrits pass on pensions, says PAS
There has been a "definite shift" away from pensions in Britain in recent years, according to the Pensions Advisory Service (PAS). Malcolm McLean, chief executive from the PAS said that many employers were cutting back on pensions, and young people were also failing to put money aside for the future.He warned that this reluctance to save was leading to a "demographic time bomb" which needed to be...
Read MoreBritons 'clueless' on overseas property laws
Britons considering buying a second home abroad are largely oblivious of the local housing laws that would affect them, a survey has shown.New research claims that 51 per cent of 35- to 44-year-olds would not consider local planning regulations when in the market for an overseas property.Foreign Currency Direct, which carried out today's survey, says that potential second-home buyers are more conc...
Read MoreIs protectionism really a major issue?
As the heads of Europe meet this weekend to discuss the ongoing economic downturn the subject of protectionism has reared its head again. Interestingly countries such as France and Italy have recently leapt to the defence of their car industries for example with substantial funding and a heavy promotion of this particular sector to try and save it from bankruptcy. However, the UK and Germany have...
Read MoreScottish Power and EDF Energy cut gas bills
Scottish Power has joined EDF Energy in announcing a cut in its gas tariffs.The Glasgow-based firm said that from June 15th its gas prices will fall by 16.5 per cent, with EDF Energy earlier revealing that its gas customers could expect reductions of 10.2 per cent from the same date.Today's price cuts follow similar announcements from other energy companies in Britain, and come a week after energy...
Read More