U.K. MONEY MARKET OFFERED EARLY ASSISTANCE

  The Bank of England said it had invited
  an early round of bill offers from the discount houses after
  forecasting a shortage in the system of around 1.1 billion stg.
      Money market dealers speculated that the central bank could
  be taking the opportunity to signal a reduction in U.K. Base
  lending rates by cutting the rates at which it intervenes in
  the discount market.
      Most operators are expecting a base rate cut today,
  possibly of one point, following yesterday's budget in which
  the U.K. Public sector borrowing target for 1987/88 was slashed
  by three billion stg.
      Among the main factors affecting liquidity, bills maturing
  in official hands and the take-up of treasury bills will drain
  some 1.11 billion stg while a rise in note circulation and
  bankers' balances below target will take out around 120 mln stg
  and 20 mln stg respectively.
      Partly offsetting these outflows, exchequer transactions
  will add some 140 mln stg to the system today.
  

