The
Bank of England
announced on Wednesday that it will intervene in the British bond market by buying government debt "to restore normal market conditions", in a context of a sharp rise in interest rates on British bonds.
The supervisor thus intervenes to try to stop the collapse of the sovereign debt since the budget changes announced last Friday by the Prime Minister,
Liz Truss
, which include the freezing of energy bills for families and a general lowering of taxes, among other measures.
"The Bank will carry out temporary purchases of long-term UK government bonds from September 28," the entity said.
"Purchases will be carried out on whatever scale is necessary to achieve this result," she adds, noting that the Treasury would cover any losses.
The Bank has also warned that there is a "material risk to the financial stability" of the country if the turmoil in the bond market continues and warns of the prospect of a "tightening of financing conditions and a reduction in the flow of credit to the actual economy".
In reaction to Wednesday's intervention, interest rates on 30-year bonds, which had risen 5.14%, their highest since 1998 at the start of the session, fell to 4.73%.
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