George Osborne unveiled a £140 billion emergency scheme to try to avoid a second credit crunch caused by the ongoing chaos in the eurozone
The Bank of England is to offer money to high-street banks to kick-start mortgage and small business lending to prevent loans being rationed for many families and entrepreneurs, the Chancellor announced.
It comes after sharp rises in the costs of mortgages and other loans in recent months as banks struggle to raise money in the midst of the single currency crisis.
Sir Mervyn King, the Bank of England Governor, said that the “industrialised world has thrown everything bar the kitchen sink” at the global economic meltdown but that even “bolder action” was now required.
Answer with complete sentences.
- What did George Osborne announce?
- Why is he doing it?
- For what purpose is the Bank of England offering money to high street banks?
- Why has the cost of mortgages risen recently?
- Who is the Governor of the Bank of England?
- Does he believe that more or less action is required by governments?
- Banks do not want to lend money – in case it is not repaid. Should governments encourage them to lend money in this situation?
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