(AOF) – Faced with a sharp rise in long rates and a weakening of the currency, the Bank of England intervened urgently by buying British bonds. “In line with its objective of financial stability, the Bank of England stands ready to restore market functioning and reduce any risk of contagion in credit conditions for UK households and businesses,” she said. Explain.
It will make temporary purchases of long-term UK government bonds from September 28.
“The objective of these purchases will be to restore orderly market conditions. The purchases will be made in the quantities necessary to achieve this result,” the Bank of England said.
The pound fell Monday morning to a historic low against the dollar and the yield on the British 10-year bond has soared since Friday following the presentation of the government’s budget plans. They included major tax cuts that would have benefited wealthier Britons.
These projects were criticized yesterday by the IMF. “Given the high inflationary pressures in many countries, including the UK, we do not recommend large, untargeted fiscal measures at this stage, as it is important that fiscal policy does not run counter monetary policy,” a spokesman for the international institution told Reuters.
Following the Bank of England’s intervention, the yield on the British 10-year fell 48 basis points to 4.03%. Meanwhile, the British pound continues to weaken, losing 0.90% to 1.0634%.
The AOF information reproduced on Capital.fr is taken from the AOF information service. This information is protected by intellectual property rights held by OPTION FINANCE SAS, publisher of the AOF real-time stock market information service, and its contributors. Consequently, any reproduction, copy, duplication, modification, transfer, redistribution, translation, commercial exploitation or not, creation of a hypertext link or reuse in any way whatsoever of this information is subject to the prior written consent of OPTION. FINANCE SAS and its contributors. AOF can be reached at the following address [email protected] OPTION FINANCE SAS collects its data from the sources it considers the safest. However, subject to its gross negligence, OPTION FINANCES SAS and its contributors do not in any way guarantee the absence of error and defects, even hidden ones, nor the exhaustive nature or the lack of conformity for any use whatsoever of this data and of OPTION FINANCE SAS or one of its contributors, and cannot be held responsible for any delays or interruptions that may affect access to them. The user of the OPTION FINANCE SAS service will use the AOF data at his own risk and must hold OPTION FINANCE SAS and its contributors harmless from any claim resulting from this use.
Receive our latest news
Every morning, the information to remember on the financial markets.