Bank of England injects UK banking system with £3.1bn of funding after Brexit

bank of england

The Bank of England has injected £3.1 billion into the UK banking system, reports The Independent.

Three special auctions, where the Bank of England makes extra funds available to banks, were planned around the EU referendum to shore up the financial system.

The £3.1 billion released on Tuesday was the last of the extra auctions announced by the Bank of England in March this year.

Lenders have taken more than £9 billion from the central bank in June.

The special funding was described as a “precautionary measure” to make banks they have the necessary cash to cope with any turmoil caused by the referendum.

The Bank allotted £3 billion to lenders but received bids totalling £6.3 billion.

It has already injected £2.5 billion in its first auction on June 14 and £317 million in the second auction on June 28.

Mark Carney, governor of the Bank of England, declared that the central bank is ready to provide an extra £250 billion through its existing facilities on Friday. He sought to reassure investors saying the UK is “well prepared” for the event.

His comments followed Prime Minister David Cameron’s announcement that he will step down later this year.

Confirmation that the UK has voted to end its 43-year membership of the EU sent sterling down to a three-decade low on Friday morning.

The FTSE 100 plunged more than 8 per cent on opening in its biggest slump since the 2008 financial crisis, wiping £120 billion off the value of the 100 biggest UK companies.

Brexit wiped a record $3 trillion off global markets in two days, according to data compiled by Standard & Poor’s Dow Jones Indices.

But markets pressure eased on Tuesday with the FTSE closing higher at 6,140.39 points.

The FTSE 250 – seen as a better indicator of UK businesses – closed at 15,503.06 – a rise of 3.58 per cent.

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  • richard j williams

    The £9Bn is an irrelevance and has little or absolutely nothing to do with Brexit. With Osborne still unable to bring down borrowing and even before the referendum he had within 5 weeks of his forecast borrowed £7.2 Bn in April alone more than £600 M over his forecast.Yet we are supposed to believ his insane forecasts of £4030 shortfall in household income by 2030 and that house prices will fall by withing 10 to 18%
    Conveniently he has now blamed Brexit for his failed budget, an that the laws of supply and demand will cease post Brexit in the housing market. !!.On this basis it is probable that England being beaten by Iceland is definitely because of Brexit too!
    The banks have over £750 Bn of liquidity and the BOE a further £250 Bn more than 10 times that available during the financial crash.
    It is puerile also for boy scribblers pointing to an 8% drop in the FTSE when it is now higher than anytime this year! What part of hype and amateur scare stories does Business Matters think will work as propaganda?