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Fri Nov 20, 2009

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Nov 06, 2009 (Daily Mail - McClatchy-Tribune Information Services via COMTEX) -- HIGHER BORROWING COSTS HIT TREASURY: Speculation that the Bank of England's money-printing scheme is coming to an end led to a leap in the government's effective cost of borrowing.

Quantitative Easing -- under which the BoE creates cash and purchases bonds -- will be boosted by GBP25bn to GBP200bn, the Old Lady said.

This was less than the previous extension of GBP50bn.

The yield on the ten-year gilt rose from 3.76pc just before the Bank's noon announcement to 3.9pc -- the highest level since July. Richard McGuire of RBC Capital Markets said: "The Bank has effectively been subsidising the government. That is no longer going to be the case."

BANKERS TO POCKET BUMPER BONUSES: City bankers are expecting bumper bonuses this year, despite efforts by political leaders to curb remuneration packages.

Some 57pc of those surveyed do not expect their employer to adjust this year's bonus structures to meet Financial Services Authority and G20 recommendations, according to the poll by eFinancialCareers.com.

The G20 leaders are due to meet in St Andrews, Scotland, tonight, with the progress of reforms in banking set to be high on the agenda.

Of the bankers surveyed, 55pc said they were anticipating a higher bonus payout in 2009 than in 2008, while 18pc are expecting an increase of at least 71pc.

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