Andrew Bailey, Governor of the Bank of England, said the global economic outlook had materially deteriorated after soaring commodity prices pushed up inflation around the world.
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The Bank of England will suspend plans to start selling gold plating next week and start temporarily buying long-maturity bonds to calm market turmoil caused by the government’s so-called “small budget”. newly caused.
UK gold-plated yields are trending their strongest monthly gains since at least 1957 as investors flee the UK fixed-income market following new fiscal policy announcements. The measures include a series of unreimbursed tax cuts that have drawn criticism globally, including by the IMF.
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In a statement on Wednesday, the central bank said it was monitoring a “significant revaluation” of UK and global assets in recent days, which has hit particularly hard. to the UK’s perennial government debt.
Bank of England said.
“In line with its financial stability objectives, the Bank of England stands ready to restore market activity and reduce any risk from contagion to credit conditions for households. and businesses in the UK.”
As of Wednesday, the Bank will begin temporary purchases of long-term UK government bonds to “restore orderly market conditions”, and said it would be done “on any scale”. necessary” to appease the market. The purchase will be funded by the UK Treasury.
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