Bank of England prepared to inject £250bn into banking system

The Bank of England has provided £3.1bn to the UK banking system following the result of the EU referendum. Mark Carney, governor of the Bank of England, has announced that it is prepared to provide an additional £250bn through its existing facilities, with funding released throughout June acting as a 'precautionary measure.' The announcement has been made in efforts to reassure investors, following the UK's Brexit vote last Thursday

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The Bank of England has injected £3.1 billion into the UK banking system.

Three special auctions, where the Bank of England makes extra funds available to banks, were planned around the EU referendum to shore up the financial system.

The £3.1 billion released on Tuesday was the last of the extra auctions announced by the Bank of England in March this year.

Lenders have taken more than £9 billion from the central bank in June.

The special funding was described as a “precautionary measure” to make banks they have the necessary cash to cope with any turmoil caused by the referendum.

The Bank allotted £3 billion to lenders but received bids totalling £6.3 billion.

It has already injected £2.5 billion in its first auction on June 14 and £317 million in the second auction on June 28.

Mark Carney, governor of the Bank of England, declared that the central bank is ready to provide an extra £250 billion through its existing facilities on Friday. He sought to reassure investors saying the UK is “well prepared” for the event.

His comments followed Prime Minister David Cameron’s announcement that he will step down later this year.

Confirmation that the UK has voted to end its 43-year membership of the EU sent sterling down to a three-decade low on Friday morning.

The FTSE 100 plunged more than 8 per cent on opening in its biggest slump since the 2008 financial crisis, wiping £120 billion off the value of the 100 biggest UK companies.

Brexit reactions – in pictures Show all 10 1 / 10 Brexit reactions – in pictures Brexit reactions – in pictures Supporters of the Stronger In campaign look at their phones after hearing results in the EU referendum at London's Royal Festival Hall AP Brexit reactions – in pictures Leave supporters cheer results at a Leave.eu party after polling stations closed in the Referendum on the European Union in London Reuters Brexit reactions – in pictures Mr Cameron announces his resignation to supporters Getty Brexit reactions – in pictures Donald Tusk proposes that the 27 remaining EU member states ‘start a wider reflection on the future of our union’ Getty Brexit reactions – in pictures Ukip leader Nigel Farage greets his supporters on College Green in Westminster, after Britain voted to leave the European Union PA Brexit reactions – in pictures Supporters of the Stronger In Campaign react as referendum results are announced today Getty Brexit reactions – in pictures Boris Johnson leaves his home today to discover a crowd of waiting journalists and police officers Getty Brexit reactions – in pictures Leave EU supporters celebrate as they watch the British EU Referendum results being televised at Millbank Tower in London Rex Brexit reactions – in pictures Supporters of the Stronger In Campaign react as results of the EU referendum are announced at the Royal Festival Hall Reuters Brexit reactions – in pictures Supporters of the Stronger In campaign react after hearing results in the EU referendum at London's Royal Festival Hall PA

Brexit wiped a record $3 trillion off global markets in two days, according to data compiled by Standard & Poor's Dow Jones Indices.

But markets pressure eased on Tuesday with the FTSE closing higher at 6,140.39 points.

The FTSE 250 - seen as a better indicator of UK businesses - closed at 15,503.06 - a rise of 3.58 per cent.