Bank of England forced to intervene in markets over ‘material risk’ to UK economy
2 years, 2 months ago

Bank of England forced to intervene in markets over ‘material risk’ to UK economy

The Telegraph  

The Bank of England has been forced to step into bond markets amid market turmoil that has sent government borrowing costs soaring and posed a risk to financial stability. It said: “Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability." “The Bank is monitoring developments in financial markets very closely in light of the significant repricing of UK and global financial assets,” the Bank said in a statement. “Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability.

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History of this topic

Bank of England to stress test for major bond market crash
1 year, 1 month ago

Bank of England to stress test for major bond market crash

The Telegraph  

Over the past two years, the Bank of England has raised its base rate from 0.1pc to 5.25pc, with the US Federal Reserve and the European Central Bank making similar moves. Jamie Dimon, chairman and chief executive of JP Morgan, recently told the Sunday Times: “Geopolitical matters are very serious - arguably the most serious since 1938.” Christian Sewing, chief …

Bank of England ‘more optimistic’ UK can avoid recession as rates hiked again
1 year, 9 months ago

Bank of England ‘more optimistic’ UK can avoid recession as rates hiked again

The Independent  

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. Read our privacy policy The Bank of England’s boss …

Stock markets rebound as Chancellor ‘stands ready’ after banking turmoil
1 year, 9 months ago

Stock markets rebound as Chancellor ‘stands ready’ after banking turmoil

The Independent  

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. Similar actions could be warranted if smaller institutions suffer …

The UK just stepped back from the brink. But there’s more trouble ahead
2 years, 2 months ago

The UK just stepped back from the brink. But there’s more trouble ahead

CNN  

London CNN Business — The decision by Jeremy Hunt, the new UK finance minister, to jettison the bulk of Prime Minister Liz Truss’ much-maligned plans to boost growth has come as a huge relief to investors, easing their worries about the sustainability of government finances. It said it sees “additional downside risks to growth” following Hunt’s announcements on Monday. “The …

‘Slow-moving car crash.’ There’s no quick fix for the UK market mess
2 years, 2 months ago

‘Slow-moving car crash.’ There’s no quick fix for the UK market mess

CNN  

London CNN Business — The Bank of England is struggling to contain a crisis triggered by the UK government’s brash plans to borrow heavily to pay for tax cuts, feeding fears that the country’s financial markets could once again spin out of control. “The market’s turned around and said, “We need you to do more.’” Bank of England Governor Andrew …

Bank of England warns of ‘material risk’ to UK financial stability
2 years, 2 months ago

Bank of England warns of ‘material risk’ to UK financial stability

Live Mint  

The Bank of England on Tuesday unveiled yet more measures aimed at calming markets rocked by a UK budget as it warned over risks to the nation's financial stability. A day after it launched a temporary facility aimed at easing liquidity pressures, the central bank Tuesday said it was widening the scope of daily purchases of UK government bonds, or …

Bank of England warns risk of UK financial crisis hasn’t gone away
2 years, 2 months ago

Bank of England warns risk of UK financial crisis hasn’t gone away

CNN  

London CNN Business — For the second time in two days, the Bank of England has been forced to offer extra support to UK markets still reeling from the government’s announcement last month that it would slash taxes and increase borrowing. The central bank warned Tuesday that there was still a “material risk to UK financial stability” from a sharp-sell …

The U.K. is staring into an economic abyss
2 years, 2 months ago

The U.K. is staring into an economic abyss

The Hindu  

It took the new British Chancellor of the Exchequer, Kwasi Kwarteng, just 25 minutes to unleash havoc when he unveiled his mini-Budget on September 23. In place of policies to boost the United Kingdom’s economy to achieve a promised 2.5% growth, the Chancellor offered promises of sunlit uplands simply as a result of reversing recent tax rises, abolishing the top …

UK central bank intervenes in market to halt economic crisis
2 years, 2 months ago

UK central bank intervenes in market to halt economic crisis

Associated Press  

LONDON — The Bank of England took emergency action Wednesday to stabilize U.K. financial markets and head off a crisis in the broader economy after the government spooked investors with a program of unfunded tax cuts, sending the pound tumbling and the cost of government debt soaring. The Bank of England said it would buy long-term government bonds over the …

Bank of England to buy U.K. government bonds to stabilise financial markets
2 years, 2 months ago

Bank of England to buy U.K. government bonds to stabilise financial markets

The Hindu  

The Bank of England said on Wednesday that it would buy as many long-dated government bonds as needed between now and October 14 to stabilise financial markets, after a slump in British gilt prices since a government fiscal statement on Friday. Citing potential risks to U.K. financial stability, the BoE also said it would delay the start of a programme …

How the Bank of England is scrambling to stabilise markets
2 years, 2 months ago

How the Bank of England is scrambling to stabilise markets

The Telegraph  

The scale has not yet been decided. It is not the Bank’s job simply to intervene when investors ditch bonds and so the Government’s cost of borrowing rises. The initial plan is to buy bonds over two weeks, but the Old Lady also said “the purchases will be carried out on whatever scale is necessary to effect this outcome” while …

UK stocks, sterling slip as BoE intervenes after IMF slams budget
2 years, 2 months ago

UK stocks, sterling slip as BoE intervenes after IMF slams budget

Al Jazeera  

The pound slumps and stocks pare losses after the Bank of England says it is buying up long-dated UK government bonds. IMF’s criticism In a highly unusual intervention, the IMF late Tuesday said it was “closely monitoring” developments and urged the government in London, led by new Prime Minister Liz Truss, to change tack. The Fund added: “We understand that …

Bank of England will buy UK bonds at ‘whatever scale’ necessary to halt crash
2 years, 2 months ago

Bank of England will buy UK bonds at ‘whatever scale’ necessary to halt crash

CNN  

London CNN Business — The Bank of England said Wednesday it would buy UK government debt “on whatever scale is necessary” in an emergency intervention to halt a bond market crash that it warned could threaten financial stability. “This repricing has become more significant in the past day — and it is particularly affecting long-dated UK government debt,” the central …

Bank of England signals ‘significant’ response to pound turmoil
2 years, 2 months ago

Bank of England signals ‘significant’ response to pound turmoil

The Telegraph  

The Bank of England’s chief economist warned it is crucial the Bank of England’s independence is respected as he signalled to volatile markets that significant interest rate rises are on the way in November. Huw Pill was speaking as long-term borrowing costs hit their highest level since 2002 on the third consecutive day of market turmoil following the Chancellor’s heavy …

Markets are now treating UK bonds like Greek and Italian debt
2 years, 2 months ago

Markets are now treating UK bonds like Greek and Italian debt

CNN  

London CNN Business — The pound may have paused its headlong crash toward parity with the US dollar, but the damage to the UK economy sparked by Prime Minister Liz Truss’ huge tax-cutting gamble is still rippling through financial markets. “This is a situation where government borrowing costs — and therefore all our borrowing costs — are incredibly vulnerable,” economist …

Bank of England urged to call emergency rates meeting next week to rescue pound
2 years, 3 months ago

Bank of England urged to call emergency rates meeting next week to rescue pound

The Telegraph  

The Bank of England has been urged to raise interest rates as soon as next week to help the pound from further weakening. Meanwhile, UK bond yields were on the rise, with the 10-year gilt yields seeing their biggest one-day surge on record in Bloomberg data. Deutsche Bank analysts said there are "very strong signals" that the market is no …

Outlook for economy has ‘deteriorated markedly’ due to soaring prices, Bank of England warns
2 years, 5 months ago

Outlook for economy has ‘deteriorated markedly’ due to soaring prices, Bank of England warns

The Independent  

Britain's economic outlook has "deteriorated materially” thanks to soaring prices stoked by Russia's invasion of Ukraine, the Bank of England has said. UK lenders will be ordered to hold an extra £22bn of capital as a buffer against economic shocks from July next year, the Bank said on Wednesday. “The economic outlook for the UK and globally has deteriorated materially,” …

Bank of England poised to take bond-buying plan above $1 trillion
4 years, 1 month ago

Bank of England poised to take bond-buying plan above $1 trillion

Live Mint  

The Bank of England is set to pump up its huge bond-buying stimulus plan to more than $1 trillion on Thursday as Britain's economy takes a fresh hit from new coronavirus lockdowns and another possible blow from a no-deal Brexit. On the day England goes into a month-long "stay-at-home order", alongside restrictions elsewhere in the United Kingdom, the BoE looks …

Bank Of England Says Market Infrastructure Passed 'Covid Test' of Volatility
4 years, 3 months ago

Bank Of England Says Market Infrastructure Passed 'Covid Test' of Volatility

News 18  

LONDON: Platforms used by markets to complete stock and bond trades stood up well to bouts of extreme market volatility in March when the economy entered lockdown to fight the pandemic, a Bank of England policymaker said on Wednesday. BoE Financial Policy Committee member Elisabeth Stheeman said efforts to increase how much capital banks hold since the last financial crisis …

Bank of England predicts slower recovery for UK economy
4 years, 4 months ago

Bank of England predicts slower recovery for UK economy

CNN  

London CNN Business — The UK economy will take longer than expected to recover from the coronavirus pandemic, the Bank of England said Thursday,as it warned of rising unemployment and other risks to its forecast, such as a second wave of infections and Brexit. “We have an unusually large downside skew on the forecast, which reflects the risks as we …

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