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08/10/2008
Interest Rate Cut Follows £50b 'Rescue Plan'
The Bank of England has sensationally slashed interest rates to 4.5%, on the same day Gordon Brown unveiled a radical £50b 'rescue plan' for UK banks.
The interest rate move came earlier than expected, with a 0.5% cut being implemented by the central bank, as well as six others.
The unprecedented step follows continued falls in the global money markets.
Earlier today, the Prime Minister announced eight of the country's biggest banks and building societies would receive a massive public capital injection.
Taxpayers will in turn gain a stake in the organisations, in the form of preference shares.
The equity scheme is aimed at shoring-up the domestic banking system, amid widespread market turmoil in the City, Europe and the US - following a plunge in economic confidence.
Mr Brown said the decision to release cash is "designed to put the British banking system on a sounder footing".
Despite this, the Stock Market still appears to be in a spin.
The FTSE 100 in London fell 5%, and while HBOS share grew by 26%, Barclays sustained an 11% drop and Standard Chartered dipped 13%.
The main points announced today:
Other banks will be offered inclusion into the plan, should they wish to apply.
By releasing the loans the government hopes to ease the increased tightening of lending between financial groups.
Chancellor Alistair Darling said: "This is beginning a process of un-bunging a big problem where banks won't lend to each other for long periods."
Terry Smith, Chief Executive of Tullett Prebon, said the government's action "should stop the panic in terms of people wondering whether or not the banks are safe".
Banks have broadly welcomed the plan.
"The government's announcement represents a very real and serious intention on the part of the authorities, following consultation with the banking industry, to bring stability and certainty to the UK banking system," HBOS said in a statement.
Barclays, Lloyds TSB and RBS extended similar sentiments.
HSBC also welcomed the plan but said it did not intend to use the recapitalisation scheme.
Preference shares are difference to ordinary dividends. These shares pay a fixed rate of interest and do not entitle the holder to voting rights.
There is a chance taxpayers could make a profit on the shares, although this is not guaranteed.
(PR/JM)
The interest rate move came earlier than expected, with a 0.5% cut being implemented by the central bank, as well as six others.
The unprecedented step follows continued falls in the global money markets.
Earlier today, the Prime Minister announced eight of the country's biggest banks and building societies would receive a massive public capital injection.
Taxpayers will in turn gain a stake in the organisations, in the form of preference shares.
The equity scheme is aimed at shoring-up the domestic banking system, amid widespread market turmoil in the City, Europe and the US - following a plunge in economic confidence.
Mr Brown said the decision to release cash is "designed to put the British banking system on a sounder footing".
Despite this, the Stock Market still appears to be in a spin.
The FTSE 100 in London fell 5%, and while HBOS share grew by 26%, Barclays sustained an 11% drop and Standard Chartered dipped 13%.
The main points announced today:
- Banks will have to increase their capital by at least £25bn and can borrow from the government to do so.
- An additional £25bn in extra capital will be available in exchange for preference shares.
- £200bn will be available in short-term loans from the Bank of England, up from £100bn.
- Up to £250bn in loan guarantees will be available at commercial rates to encourage banks to lend to each other.
- To participate in the scheme banks will have to sign up to an FSA agreement on executive pay and dividends.
Other banks will be offered inclusion into the plan, should they wish to apply.
By releasing the loans the government hopes to ease the increased tightening of lending between financial groups.
Chancellor Alistair Darling said: "This is beginning a process of un-bunging a big problem where banks won't lend to each other for long periods."
Terry Smith, Chief Executive of Tullett Prebon, said the government's action "should stop the panic in terms of people wondering whether or not the banks are safe".
Banks have broadly welcomed the plan.
"The government's announcement represents a very real and serious intention on the part of the authorities, following consultation with the banking industry, to bring stability and certainty to the UK banking system," HBOS said in a statement.
Barclays, Lloyds TSB and RBS extended similar sentiments.
HSBC also welcomed the plan but said it did not intend to use the recapitalisation scheme.
Preference shares are difference to ordinary dividends. These shares pay a fixed rate of interest and do not entitle the holder to voting rights.
There is a chance taxpayers could make a profit on the shares, although this is not guaranteed.
(PR/JM)
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05 May 2011
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The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.
Bank Of England Maintains Bank Rate At 0.5%
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.
07 November 2013
Bank Of England Maintains Bank Rate At 0.5%
The Bank of England's Monetary Policy Committee has voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375bn.
Bank Of England Maintains Bank Rate At 0.5%
The Bank of England's Monetary Policy Committee has voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375bn.
05 February 2009
Mortgage Lenders Vow To Pass Further Interest Rate Cuts
Four of the UK's biggest mortgage lenders have vowed to pass on the interest rate cuts, which were today announced by the Bank of England (BoE). The bank said the rate cuts, and government measures to boost the economy, "would provide a considerable stimulus to activity as the year progressed".
Mortgage Lenders Vow To Pass Further Interest Rate Cuts
Four of the UK's biggest mortgage lenders have vowed to pass on the interest rate cuts, which were today announced by the Bank of England (BoE). The bank said the rate cuts, and government measures to boost the economy, "would provide a considerable stimulus to activity as the year progressed".
30 September 2008
Tesco's 10% Profit Growth Amid Weak Economy
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Tesco's 10% Profit Growth Amid Weak Economy
Weaker trading conditions have not refrained Tesco from meeting half-year profit targets - with the supermarket giant today reporting a 10% growth in UK sales. Adverse market conditions have failed to damage the retailer's performance - amid calls for interest rate cuts and radical moves to stabilise the global financial services industry.
03 May 2013
RBS 'Could Be Privatised' By Next Year
The chairman of the Royal Bank of Scotland (RBS) has said the bank will be set to return to the private sector next year. Sir Philip Hampton made the comment in a video statement on the bank's website after the institution reported a return to profit for the first three months of the year.
RBS 'Could Be Privatised' By Next Year
The chairman of the Royal Bank of Scotland (RBS) has said the bank will be set to return to the private sector next year. Sir Philip Hampton made the comment in a video statement on the bank's website after the institution reported a return to profit for the first three months of the year.
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Northern Ireland WeatherToday:It will be cloudy again throughout the day. Mainly dry in the morning, but patchy drizzle in places, becoming more widespread and persistent in the afternoon. Freshening southwesterly winds. Maximum temperature 12 °C.Tonight:Cloudy with a spell of heavy rain pushing south through late evening and the early hours, followed by some clear spells. Minimum temperature 6 °C.
