The Bank of England has stepped in with further emergency action for the second day running to head off a “fire sale” of UK government bonds, amid ongoing turmoil in markets triggered by the Chancellor’s mini-budget.
The central bank warned that the sell-off in the UK gilt market poses a “material risk to UK financial stability” after yields on long-dated gilts soared once more on Monday, despite action by the bank and government to try to allay investor concerns.
It will now widen the scope of its bond-buying programme to include purchases of index-linked gilts – a type of UK government bond that tracks inflation.
