Bank of England backtracks on money market tactics

In a remarkable about-turn, the Bank of England yesterday moved to inject liquidity into the longer-term money market by announcing plans to provide funds at three-month maturity against a wide range of collateral, including mortgages.

The first auction will be next week for £10 billion. Three further auction will be held at weekly intervals; the size to be decided in due course.

This measure was being taken "to alleviate the strains in longer-maturity money markets", said the Bank.

The action