Bank of England QE £75 billion surprise

Taking most of the market watchers by surprise yesterday,the Bank of England has instigated another round of QE (Quantitative Easing) to the tune of £75 billion.

The idea is for the Bank to feed this sum ino the financial system and it will eventually feed through into cheaper loans, mortgages and hopefully money that the Banks will have lend to small businesses and start-ups who are starved of finance.

Sir Mervyn King, the Governor of the Bank of England said that the current financial crisis could be the worst ever seen in the UK and there would be further QE if necessary.

Behind the scenes, European leaders are trying to protect Banks from potential Greek fall out, depending on the amount of losses they might need to absorb. UK Banks shares have made gains in the region of 7% plus on the Bank of England moves and potential protection from the Greek default, with the Footise gaining just under 4%.