UK Government injects funds into Banks

This morning the UK Government has announced that it will be helping the UK Banking system by injecting funds into it.

This move was widely predicted and was announced at 7:40am this morning (8th October 2008).

The aim of this move is to encourage banks to lend to each other - as the Government is offering a form of protection on money lent between banking organisations. With banks lending to each other more freely it is thought that they will be more willing to lend to consumers as well.

Share prices across the world opened very slowly this morning but it will be interesting to see how the UK Governments announcement will effect share prices today in the UK.