Funding pressures influencing rate votes: BoE’s King

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Banks' elevated funding costs are playing an important role in the Monetary Policy Committee's (MPC) deliberations, Mervyn King, the governor of the Bank of England, on Wednesday said.

A chart in the May Inflation Report, also released on Wednesday, highlights that the spread between bank rate and marginal funding costs is now far wider than before the crisis. Before the crisis, the spread was negligible, but the chart shows that the spread is now around 1.5 percentage points.

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