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Against the backdrop of an unprecedented repricing in UK assets, the Bank announced a temporary and targeted intervention on Wednesday 28 September to restore market functioning in long-dated government bonds and reduce risks from contagion to credit conditions for UK households and businesses.
In line with the Bank’s financial stability objective and in order to avoid dysfunction in core funding markets, the purpose of these operations is to enable liability driven investment (LDI) funds to address risks to their resilience from volatility in the long-dated gilt market. LDI funds have made substantial progress in doing so over the past week.
As previously announced, the Bank plans to end these operations and cease all bond purchases on Friday 14 October.
In the final week of operations, the Bank is announcing additional measures to support an orderly end of its purchase scheme.
Beyond the end of this week’s operations, the Bank will continue to work with the UK authorities and regulators to ensure that the LDI industry operates on a more resilient basis in future.
The Bank has published a market notice outlining all operational details.
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