'A short-term fix': Industry reacts to the BoE's bond markets intervention

'An extraordinary policy quagmire'

Quantitative easing is unlikely to be anything other than "a very short-term fix", the industry has warned, leaving long-dated gilts still vulnerable despite the Bank of England’s bond markets intervention.

This morning (28 September), the central bank announced that it will buy long-dated government bonds on a temporary basis and pause the start of quantitative tightening to "restore orderly market conditions" and prevent a "material risk to financial stability" arising from market turmoil after last week's Mini Budget. This represents a monetary U-turn for the central bank, as its Monetary Policy Committee had been pursuing a policy of selling down the bank's bond holdings. This was set to begin on 3 October, but has been postponed to 31 October.  Bank of England intervenes with tempor...