Banks take Old Lady's money

The Bank of England's adoption of a new auction method for open market operations met with success on Tuesday as all of the available funds were allocated.

The Bank accepted bids above 5.36% for three-month funds, 14 basis points below bank rate, a move which signalled a desire to get interbank rates nearer policy rate levels. The result was that the Bank allocated all £10 billion-worth ($20 billion) of three-month money, charging an average borrowing cost of 5.95%, 45 basis point above bank

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