BOE Received Most Bids in Three Months at Auction

April 17 (Bloomberg) -- The Bank of England said financial institutions bid for 50 billion pounds ($99 billion) in its weekly auction, the most in three months, as a worsening shortage of credit increased the need for central bank funds.

The Bank of England offered 13.7 billion pounds in today's sale, it said in a statement in London. That made the operation more than three times oversubscribed. Total bids were the most since Jan. 10.

Financial institutions are struggling to raise money and refusing to pass on the Bank of England's interest rate cuts to consumers. That's forcing Prime Minister Gordon Brown and policy makers to find new ways to end the logjam in credit markets. The cash shortage has already ended the U.K.'s decade-long housing boom and threatens to push the economy into a recession.

Source: Bloomberg


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