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BoE ends emergency action.

 

BoE ends emergency action.

The Bank of England has fully unwound the bond-buying programme initiated when Liz Truss was prime minister, bringing to an end the emergency measures needed to stabilise the economy after her disastrous «mini» Budget.

Announcing it had sold £19.3bn of government bonds back to «interested buyers» in a «timely but orderly unwind of this portfolio», the BoE put the last elements of the Trussonomics crisis response to bed yesterday.
This resulted in a huge leap in government borrowing costs, a fall in sterling to its weakest ever level against the US dollar and a crisis in parts of the pension system.
Defined benefit pension providers were forced to sell the long-dated government bonds they owned to meet sudden calls for cash as their value tumbled, sending the market into a tailspin.
In the end, the central bank did not have to use the full financial firepower it put on the table, partly because its commitment to intervene stabilised markets. Andrew Bailey, BoE governor, put his job on the line by warning pension funds they had a limited time to repair the damage to their finances before the bank ended its crisis measures.
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  1. Adam13 January 2023 at 12:14

    The BOE's decision to end emergency action is a positive sign for the economy. Looking forward to seeing the results of this.

    ReplyDelete
  2. Aurora13 January 2023 at 13:42

    That disastrous "mini" Budget is addressed well now but I still think they need to do a bit more to get things under control. But a good step towards that nonetheless.

    ReplyDelete

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