The Bank of England announced on Tuesday an expansion of its emergency bond buying operation in an effort to restore order to the country’s chaotic bond market.
Starting Tuesday, the BoE said it would purchase up to 5 billion pounds ($5.51 billion) of index-linked gilts per day, in addition to the same-sized purchases of conventional long-dated gilts.
“The Bank is announcing today that it will widen the scope of its daily gilt purchase operations also to include purchases of index-linked gilts,” the central bank said in a statement Tuesday.
“This enhancement to our operations will be in effect from 11 October 2022 until 14 October 2022 alongside the Bank’s existing daily conventional gilt purchase auctions.”
The move is the Bank’s second expansion of its extraordinary package in as many days, following an increase in the limit for its daily purchases on Monday, ahead of the purchase scheme’s scheduled end on Friday.
The Bank’s emergency intervention in the market for long-term British government bonds (also known as “gilts”) was launched on September 28 in response to a historic decline in value.
