The Bank of England today announced an emergency government bond-buying programme to stave off a “material risk to UK financial stability” that could see borrowing costs spiral.
The central bank said it was stepping in to buy gilts at an “urgent pace” after fears over the UK Government’s economic policies following Kwasi Kwarteng's mini-budget sent the pound tumbling and sparked a sell-off in the gilts market.
The pound hit an all-time record low of 1.03 against the US dollar on Monday. But also the yield on 10-year gilts - which is a proxy for the effective interest rate on public borrowing - has also soared by the most in a five-year period since 1976.
