Gilt market intervention gives 'breathing room' to embattled DB schemes

Intervention stabilises market after schemes rush to sell bonds

clock • 6 min read

The Bank of England (BoE) decision to intervene in the long-dated UK government bond market has stabilised the market and been broadly welcomed by investors.

Yesterday morning (28 September) the central bank said it would carry out temporary purchases of long-dated UK government bonds immediately in order to "restore orderly market conditions", adding the purchases would be carried out on "whatever scale is necessary to effect this outcome". The BoE later said it would target conventional gilts with a residual maturity of more than 20 years in the secondary market, initially at a rate of up to £5bn per auction. The first of these auctions was conducted yesterday between 3:00pm and 3.30pm. It said subsequent auctions would be conducted on...

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