The latest news from the City is that the Bank moves to rein in consumer lending by increasing the amount of capital that British banks have to hold in reserve, so limiting the amount they have to lend.

The move reverses an earlier fall in the counter-cyclical capital buffer, the mechanism whereby banks are required to hold extra capital. The Bank has pushed it up to 0.5 per cent from its current level of 0 per cent and said that it would go to 1 per cent in November. Each 0.5 percentage point rise requires banks to hold an extra £5.7 billion.

The Bank’s financial policy committee has identified two other concerns: the level of borrowing in China, which could affect the global economy and UK banks; and property prices here. It warns that UK corporate bonds and property could be overvalued, in particular in the West End, where office prices are well above the range of sustainable valuations.

Meanwhile the euro is responding to some positive remarks about the eurozone by Mario Draghi, head of the European Central Bank. Mr Draghi has indicated his belief that the economy is continuing to recover, with deflationary forces being replaced by inflationary ones.

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