First Quantitative Easing auction oversubscribed by banks this afternoon 11.03.2009

Author: David Whittaker Posted on: 11 March 2009

The first Quantitative Easing Auction today attracted no takers from the non-Bank Sector this morning but the Banks piled in big style at £10.5Bn against the available £2Bn at 2.15pm this afternoon.

The question is now whether that the momentum will continue and will the money supply start to improve? This should be measured in two ways:

1. SWAP rates noting gilt yields easing unless HMG issue too many out of the "back door"

2.  3 month LIBOR rate coming down fromm its plateau at 1.91% and trying to establish some connectivity with BBR at 0.5%

We are not holding our breaths but this APF does offer some transparency and may at last encourage a bit more open dealing out there...ultimately it will lead to improved mortgage and business finance supply.

You can keep up to date on our quantitative easing updates and views online.

Author: David Whittaker