Like most of the banks, the Bank of England has made a bundle out of the credit spreads of the last six months. Locking in bank loans at 5.5 percent interest rates fixed for nine months, the rapidly dropping rates to just 0.5 percent earlier this year meant that the Bank made a billion in fact.
That's about 50 years worth of spending a dollar a second (see earlier blog).
The Bank made £7 million from Bradford & Bingley's failure, and £4 million from Northern Rock's.
No wonder Mervyn King's pension pot has shot up to £5 million this year.