Things are moving fast in the financial markets. On Monday the governor of the Bank of England, Andrew Bailey, put out what he hoped would be a calming statement. Within 24 hours it was clear words alone were not going to be enough. There was evidence of a run on pension funds that was forcing them into a fire sale of their assets.
As a result, Threadneedle Street has been forced to extend its policy response. In a “whatever it takes” moment, the Bank said it would buy an unlimited amount of government gilts to stem the market panic. This represents a U-turn for an institution that less than a week ago pledged to start running down its stock of government bonds, but the Bank was left with no alternative.
