The Bank of England was split three ways over how much to increase interest rates as it opted to lift them to their highest level to avoid a liquidity crisis.
In December 2010, Treasury had been offering £17.7bn for the Treasury to borrow and $6.5bn for the United States to help balance out its fiscal deficit.
This move was a big one and the U.S. Treasury remained in the agreement. However, it was further complicated when the United Kingdom, Spain and Switzerland joined the agreement and agreed to take an extra £2.6bn. This was a huge blow to the U.S. economy and contributed to the collapse of the debt-fuelled debt mess and the government was now scrambling to put in place a new deal.
The agreement was signed on Thursday, 17 March 2011. The deal includes a new Bank of England scheme.
If the United Kingdom and Spain continue to see a contraction over the next few months, they will take another big step, to raise interest rates.