Questions over £500bn bank rescue
Updated on 08 October 2008
Biggest emergency deployment of public money in UK peacetime history raises key questions - how will it be paid for, how will it be managed?
In a rescue package unprecedented in its scale, the British government announces a 0.5 per cent interest rate cut and pledges up to half a trillion pounds to prop up UK banks.
For the first time in more than a decade, the rate cut was announced in the Commons by the prime minister, rather than the Bank of England.
The chancellor, Alistair Darling, said the package would help to "unbung a big problem" of banks' unwillingness to lend to one another.
- base rate goes down from five to 4.5 per cent
- £50bn is being made available to the banks, half of it immediately and the rest if required later
- £200bn in short-term loans, an increase from the £100m already announced
- up to £250bn in loan guarantees, if needed, to encourage bank lending
