11 Sep

King explains liquidity plan

King explains liquidity plan

Bank of England governor Mervyn King has met MPs at Westminster to explain the thinking behind the monetary policy committee's approach to interest rates.

Mr King said that at present he expected to have to write another letter to chancellor of the exchequer Alistair Darling next week explaining why consumer prices index inflation - currently at 4.4 per cent - is above its three per cent target.

While this may mean no imminent reduction in interest rates to help cut mortgage costs, Mr King did add that the Bank will publish proposals next week for a replacement of its special liquidity scheme, although he said this would not be a long-term measure.

The special liquidity scheme was set up in April to offer £50 billion in bonds to lenders to help them raise capital, with the intention that this would gradually free up more funds for mortgage lending.ADNFCR-1222-ID-18776109-ADNFCR

Cookies We use cookies to ensure that we give you the best experience on our website. To find out more about our cookies policy, see our cookies policy here or in the footer.