Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
The Bank of England's decision to start buying long-dated gilts came after it became aware of the sheer scale of the risks to financial stability as yields spiraled in the wake of the government's mini-Budget, Deputy Govenor Jon Cunliffe told the Treasury Select Committee in a letter published Thursday. In the letter, Cunliffe reiterated that the purchases would not be a material factor in monetary policy making.
Cunliffe said that the Bank's buying operations "are not intended to create central bank money on a lasting basis, nor are they designed to cap or control long-term interest rates ..They should not shift the underlying monetary trends in the economy .. and so they are not monetary policy operations."
In a lengthy explanation, Cunliffe said that the Bank's operation was designed instead to give the LDI time to put their operations on to a sustainable footing and the Bank and other regulators were closely monitoring what is happening to the LDIs, with gilt buying scheduled to end Oct 14.
UK 30-Year Gilt Yield over last 10 trading days
Source: Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.