Bank of England in fresh emergency move to calm markets

The Bank of England has warned of a “material risk” to financial stability as it made a fresh emergency move to try to calm investors.

The Bank said it would buy more government bonds to try to stabilise market conditions.

Its emergency scheme started after September’s mini-budget, which spooked markets and drove up borrowing costs.

Government borrowing costs rose again sharply on Monday after the Bank said the scheme would end this week.

A decision by the chancellor to bring forward his plan to balance the government’s finances by three weeks also failed to reassure investors.

Kwasi Kwarteng promised billions of pounds of tax cuts in his mini-budget without explaining how he would pay for them.

It worried investors causing the pound to slump to a record low, government borrowing costs to surge and forcing the Bank of England to step in and take emergency action after the dramatic market movements put some pension funds at risk of collapse.

Since then, the government has come…

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This article was written by and originally published on www.bbc.co.uk