UK pension schemes ran close to the risk of collapse in the 'unprecedented' financial meltdown following the Government's recent mini-budget, says the Bank of England. The bank had to instigate its emergency gilt-buying programme for the first time in "pursuit of its statutory financial stability objective".
In a letter to the Treasury Select Committee, Sir Jon Cunliffe - the bank's deputy governor of financial stability - said there had been a risk of severe disruption of core markets and “widespread financial instability”. The £65billion gilt-buying programme was launched last week in the wake of Chancellor Kwasi Kwarteng's mini-budget.
The Bank said it had stayed well within its daily limit of £5bn in gilt purchases in the letter to Treasury Select Committee chairman Mel Stride. It was forced to begin the programme after fears that some UK pension schemes were at risk of collapse, reports PA.
