A rush to dump UK government bonds following a botched budget announcement forced a dramatic intervention by the Bank of England on Wednesday. The central bank promised to buy long-term bonds “on whatever scale is necessary” to restore order in the market.
It amounted to an official declaration of imminent financial crisis, apparently centered on pension funds facing insolvency as bond prices dropped. The intervention seemed to help: The pound regained some of the value it lost earlier in the week. Still, a clearer indictment of economic mismanagement would be hard to imagine. Having started so calamitously, what can Britain’s new prime minister, Liz Truss, do to repair the damage?