Sign Up
..... Connect Australia with the world.
Categories

Posted: 2022-10-12 12:04:34

Britain's economy faced new shocks after the Bank of England ruled out extending an emergency debt-buying plan – and the government appeared to blame the independent central bank for the U.K.'s economic turmoil.

The pound sank against the US dollar and the cost of government borrowing rose early on Wednesday after Bank of England (BoE) Governor Andrew Bailey confirmed that a program to buy government bonds, introduced last month to stabilise financial markets, will end Friday as scheduled.

"My message to the [pension] funds involved — you've got three days left now. You have got to get this done," Mr Bailey said late on Tuesday in Washington.

"Part of the essence of a financial stability intervention is that it is clearly temporary."

Analysts say pension funds had lobbied the central bank to extend the program by two weeks.

The pound fell by almost 1 per cent, to just below $US1.10, after Mr Bailey spoke, before rallying slightly after the Financial Times reported that the bank was, after all, prepared to keep buying bonds beyond the Friday deadline.

However, the bank quashed that report, saying its "temporary and targeted purchases" of government bonds "will end on October 14".

"The governor confirmed this position yesterday and it has been made absolutely clear in contact with the banks at senior levels," the bank said.

Tax cuts spook markets

View More
  • 0 Comment(s)
Captcha Challenge
Reload Image
Type in the verification code above