Bank of England launches ‘urgent’ action as UK ‘pension funds lose big’

The BoE announced it would step in to buy government bonds at an “urgent pace” after fears over the government’s economic policies caused the pound to plummet.

The bank said: “Should dysfunction in this market persist or worsen, there would be a significant risk to UK financial stability.

“This would lead to an unwarranted tightening of financing conditions and a reduction in the flow of credit to the real economy.

“In line with its objective of financial stability, the Bank of England stands ready to restore the functioning of the market and reduce any risks of contagion to credit conditions for UK households and businesses.”

The Treasury responded by reaffirming its commitment to the Bank of EnglandIndependence and said the government will “continue to work closely with the bank to support its financial stability and inflation targets”.

It said the bond-buying program was temporary, beginning today through Oct. 14.

“The purpose of these purchases will be to restore orderly market conditions,” the bank said.

It comes amid a warning that pension funds could be hit if the British pound plummets.

Sam Coates, deputy political editor at Sky News, warned: “I’ve been told: – Pension funds are being hammered and losing huge amounts of capital – Banks are forcing them to margin call and liquidate assets – so Gilts – Some pension funds are losing large amounts of their fund – hence the BoE stepped in.”

He added: “They’re worried about systemic risk and without moving today, some pension funds could go under (they still could) – There’s a global bond crisis, “so probably the worst time in recent history for unfunded commitments to do,” says a source.” Bank of England launches ‘urgent’ action as UK ‘pension funds lose big’

Fry Electronics Team

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