MNI BRIEF: Gilt Moves Orderly, 'So Far, So Good'- BOE Breedon
MNI (LONDON) - Bank of England Deputy Governor Sarah Breeden rejected the idea that the UK gilt market has become dysfunctional, while stating that the BOE was keeping a close eye on it after longer-term yields have risen sharply recently.
She cited global factors behind the sell-off in gilts. "We're monitoring what's happening in the gilt market. It's a core market, we care a lot about it. A lot of the price moves reflect global factors happening in the US and in Europe, as well as here in the UK, and that's to be expected as markets react to news about what the outlook is for the fiscal position ...We're monitoring it ...so far, so good," she said
In other remarks in the Q and A Breeden noted uncertainty over assessing developments in the UK supply side, with the Bank undertaking a supply side stocktake for its February forecasting round, while adding that most of the hit from Covid to labour supply shortages appeared to have passed through.