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The Market Pain Levels That May Spark the Next UK Policy Action

  • Respite from BOE’s intervention is already proving fleeting
  • Pound parity, bond liquidity, mortgage rates are all risks

The Bank of England’s emergency action has restored a semblance of order to the UK’s financial markets, yet the next pain threshold may not be too far away.

The respite from the BOE’s billions in bond-market buying in the past two days has already proved somewhat fleeting. Government debt and the pound keep swinging between gains and losses, while the cost of insuring against a UK default is at the highest since the Brexit vote in 2016.