Bank’s intervention may not mark the end of market mayhem
Bank of England's fourth round of QE could still fail to calm markets and be followed by an emergency interest rate rise
Things are moving fast in the financial markets. On Monday the governor of the Bank of England, Andrew Bailey, put out what he hoped would be a calming statement. Within 24 hours it was clear words alone were not going to be enough. There was evidence of a run on pension funds that was forcing them into a fire sale of their assets.
As a result, Threadneedle Street has been forced to extend its policy response. In a whatever it takes" moment, the Bank said it would buy an unlimited amount of government gilts to stem the market panic. This represents a U-turn for an institution that less than a week ago pledged to start running down its stock of government bonds, but the Bank was left with no alternative.
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