The UK government is receiving a further funding boost directly from the central bank, to power the immediate cost of fighting the impact from coronavirus, with the assistance from the Bank of England to finance the country’s spending needs on a temporary basis.
There are growing expectations that the quarantining will be extended next week, in the UK, as the Treasury said it needed extra firepower in order to support its cash flow, ensuring financial markets ran smoothly.
In a joint statement, the Treasury and the Bank said they had agreed to extend the use of the Ways and Means facility. Noting:
As a temporary measure, this will provide a short-term source of additional liquidity to the government if needed to smooth its cashflows and support the orderly functioning of markets, through the period of disruption from Covid-19.
This is a positive for GBP and for UK stocks, receiving a boost on this extra cash being provided to fund the governments much needed stimulus measures.
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