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Government's financial bail-out welcomed

Government's financial bail-out welcomed

Category: Loans

Updated: 31/10/2008
First Published: 20/10/2008

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The government has announced that it is investing £37 billion to help stabilise the UK's banks.

Commercial investment is to be made in Royal Bank of Scotland, as well as in Lloyds TSB and HBOS when a merger of the two is completed.

It is hoped that the money will benefit businesses, borrowers and savers by strengthening the economy and the move has been welcomed by Moneyfacts.co.uk.

Spokesman for the site Darren Cook noted that banks may now have more confidence to lend to each other, helping those seeking secured loans.

And he explained that although consumers may not see a short term benefit, "no action by the government would have resulted in a possible meltdown of the banking system, which would have adversely affected every household in the UK".

Last week the Bank of England took some pressure off those with secured loans by cutting the official base rate of interest by 0.5 per cent.

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