Bank to pump £10bn into money markets

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The Bank of England today made its latest bid to ease the pressure of the credit crunch by announcing plans to pump £10 billion into short-term money markets next week.

The decision follows similar moves in December and January "in view of continuing elevated pressures in short-term funding markets", according to the Bank.

It will offer the extra cash to ease the pressure on banks reluctant to lend to each other following the freeze in financial markets last year.

The rate at which banks lend to each other for three months has crept steadily higher since the Bank's last intervention in January, prompting today's move.

The Bank will consider a similar intervention in April depending on next week's results.