London, Oct 11 (SocialNews.XYZ) The Bank of England has been forced to unveil more measures aimed at calming markets, warning of a "material risk to UK financial stability".
It's going to extend its purchases of government bonds (also known in the UK as gilts) to stave off worries about a collapse in their value, the BBC reported.
Bonds are effectively IOU notes which are bought by investors, with pension funds especially reliant on buying them.
The backdrop is last month's mini-budget delivered by Chancellor Kwasi Kwarteng, which shook market confidence in the UK economy, BBC reported.
The Bank of England made its latest intervention amid warnings of a fresh risk to UK financial stability.
The move is part of a continuing response to a huge sell-off of the government bonds by investors in the wake of the chancellor's mini-budget late last month.
The backdrop is the weakening of the pound, which initially plunged to its lowest value on record at the end of September before recovering and in recent days dropping again.
As a result, the Bank is committing yet more money to snapping up gilts, in order to try and maintain their value.
It describes the move as "a further backstop to restore orderly market conditions".
Source: IANS
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