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MNI INSIGHT: Functioning Market Allows BOE Gilt Buying Exit

(MNI) London

Emergency BOE gilt purchases look set to conclude Oct 14.

The Bank of England's buying of long-dated UK gilts looks set to end as scheduled on Oct 14 as debt markets return to relative calm with yields higher than in the days leading up to the bout of undefined “dysfunction” which prompted the announcement of emergency purchases on Sept 28, but no sign that such extreme conditions persist.

While the Bank sprung into action to protect over-exposed pension funds during last month’s sharp sell-off, not only postponing plans for active gilt sales until Oct 31 but promising to buy debt, it has avoided providing any precise definition of the “dysfunction” which it said threatened financial stability.

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The Bank of England's buying of long-dated UK gilts looks set to end as scheduled on Oct 14 as debt markets return to relative calm with yields higher than in the days leading up to the bout of undefined “dysfunction” which prompted the announcement of emergency purchases on Sept 28, but no sign that such extreme conditions persist.

While the Bank sprung into action to protect over-exposed pension funds during last month’s sharp sell-off, not only postponing plans for active gilt sales until Oct 31 but promising to buy debt, it has avoided providing any precise definition of the “dysfunction” which it said threatened financial stability.

Keep reading...Show less