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Central Banks

UK Fails to Calm Market Rout as BOE, Treasury Delay Action

  • Bailey indicates BOE response may wait until November meeting
  • Pound slips back after earlier erasing loss against dollar
Updated on

The Bank of England and UK Treasury failed in a joint bid to calm financial markets as both indicated investors will need to wait until November for a broader policy response to the fallout from the new government’s massive tax cuts.

After a day that saw sterling drop to a record low against the dollar and gilt yields soar, speculation had been rife that the UK would launch a stronger intervention, possibly including emergency interest-rate hikes, to stem the decline. Instead, another round of selling hit the pound after a BOE statement that came about 14 hours after sterling’s plunge.