18 June 2012

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Sir Mervyn King, Bank of England Governor and the Treasury disclosed on BBC.co.uk plans to offer £80 billion to banks on the proviso that that it is forwarded to business and consumers via cheaper mortgages and loans.

The Bank of England is also set to offer cheap cash loans to high street banks, starting this week. The Extended Collateral Term Repo Facility operation will also enable banks to switch poor assets such as credit card debt for a six month cash loan.

The new funds will be provided on top of the £325 billion the Bank of England has also poured into the economy through its quantitative easing measures.

James Cotton, of London and Country Mortgages, commented in the Daily Mail that the announcement alone could improve lenders’ confidence.

He noted that: ‘It might help the price of mortgages come down a bit. There might also be a bit more of a choice of mortgages.’

@MovewithUsbiz

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