Bank of England takes fresh emergency action as it warns UK economy 'at material risk'


    Governor Andrew Bailey announced emergency action almost a fortnight ago due to a rapid sell-off in bonds. However, further intervention was needed this morning after the action failed to successfully calm the markets.

    The Bank said: “The beginning of this week has seen a further significant repricing of UK Government debt, particularly index-linked gilts.

    “Dysfunction in this market, and the prospect of self-reinforcing ‘fire sale’ dynamics pose a material risk to UK financial stability.”

    It added that its latest efforts will “act as a further backstop to restore orderly market conditions”.

    The markets reacted negatively when Mr Kwarteng announced the Government’s tax-cutting plans on September 23 without publishing the Office of Budget Responsibility’s (OBR) independent growth forecasts.


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