UK government expands overdraft with Bank of England

FILE PHOTO: The spread of the coronavirus disease (COVID-19) in London
FILE PHOTO: A security officer stands outside the Bank of England, as the spread of the coronavirus disease (COVID-19) continues, in London, Britain, March 23, 2020. REUTERS/Toby Melville/File Photo

April 9, 2020

LONDON (Reuters) – Britain’s government said it had expanded its overdraft with the Bank of England, known as the Ways and Means facility, to ensure it had access to funds in case COVID-19 disruption renders it unable to raise money from markets easily.

The finance ministry and the Bank said the facility would support market function by minimising the immediate impact of raising additional funding in gilt and sterling money markets.

“The government will continue to use the markets as its primary source of financing, and its response to Covid-19 will be fully funded by additional borrowing through normal debt management operations,” the BoE and finance ministry said in a joint statement.

“Any drawings will be repaid as soon as possible before the end of the year,” they said.

(Reporting by Kate Holton, editing by David Milliken)

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