Why are Britain’s pension schemes dumping government bonds?

Sign up for the View from Westminster email for expert analysis straight to your inbox Get our free View from Westminster email Get our free View from Westminster email SIGN UP I would like to be emailed about offers, events and updates from The Independent. Ms Truss insisted on Thursday that chancellor Kwasi Kwarteng’s uncosted giveaway mini-Budget, widely seen to favour the rich and rely too heavily on “reckless” borrowing, would ultimately drive growth as intended and put the British economy on a “better trajectory” that would enable it to escape its current cost of living crisis. Now, defined-benefit pension schemes are dumping government bonds en masse, wiping billions of pounds off the stock market value of Britain’s biggest retirement funds. Responding to this emerging crisis on Wednesday, the BoE said it would intervene to buy up long-dated government bonds at an “urgent pace” to calm the gilt sector. Kwasi Kwarteng and Liz Truss “In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses.” The Bank’s strategy will see it invest around £5bn a day in buying up state debt until 14 October, a bailout programme costing around £65bn all in.