Andrew Bailey is not for budging. The emergency gilt-buying scheme will end on Friday, says the governor of the Bank of England, and you’d better believe him. “You’ve got three days left now,” he warned pension funds on Tuesday evening, urging them to get their liquidity positions in order. And, in case anybody still doubted his determination, Threadneedle Street said the same again on Wednesday.
At this point, we must assume Bailey means it. If the Bank performed a U-turn on its gilts market operation, nobody would believe anything it said in future. So why has the governor chosen to go to war over a programme under which only relatively modest sums have been spent so far? And what happens if more mayhem breaks out in gilt markets next week when the Bank says it will be offside as a buyer?
