‘Fire Sale’ Risk in Bonds Pushes BOE to Step Up Measures
- Central bank allocates £5 billion to buying index-linked gilts
- ‘Fire sale’ dynamics pose financial stability risk, BOE says
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The Bank of England is expanding the scope of its bond purchases to include inflation-linked debt in an effort to avert what it called a “fire sale” that threatens financial stability.
It’s the second time this week the central bank has added to its arsenal of tools aimed at curbing market turbulence. The move, coming on the heels of Monday’s record selloff in inflation-linked debt, had the immediate effect of bringing some calm to the market.