Central Banks
Bailey Risks BOE Credibility in Vow to End Gilt Buying
- Markets tumbled after Bailey vowed to stop buying bonds
- Sterling pared some losses on report program may be extended
This article is for subscribers only.
Governor Andrew Bailey put the Bank of England’s credibility on the line with a pledge to end emergency gilt purchases as scheduled on Friday, in the face of mounting market pressure to extend the program.
Investors dumped UK assets after Bailey told pension funds they have just “three days left” to sort out their liquidity positions before the bond-buying will be halted. Sterling dropped below $1.10 for the first time since Sept. 29 and even US stocks fell following his remarks.