Quote:
Originally Posted by Mozza
Then it's a subsidy which take the piss given the end of the 10p tax band and the full retreat on non-dom tax
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It's cheaper than the price the banks pay to fund themselves at the interbank lending rate. It's not an especially cheap source of funding.
The reason the Bank of England wants to do this is because it wants to lower the interbank lending rate, which, besides making it a bitch to borrow from another bank, has ramifications on floating mortgages, company borrowing, business loans and consumer credit. It's not especially to help out the banks; in fact it's pretty unattractive for them, unless they're desperate.
By the way, the government didn't retreat on non-dom tax - I still have to declare my assets or face the £30k charge. They just retreated on how detailed I have to make the declaration.