BoE's Pill assures gilt yields purchase not to cap rates

Thursday, 29. September 2022 17:48

Bank of England (BoE) Chief Economist Huw Pill underscored on Thursday that the purchase of the government bonds, which the bank announced the day before, is not intended to "cap or control longer-term interest rates," stressing that the intervention is targeted specifically at bonds market.

"That is why yesterday’s intervention is a temporary and targeted financial stability operation," Pill explained speaking before the Institute of Directors in Northern Ireland. The bank's chief economist underlined that yesterday's decision is not a "monetary policy operation" but "intended to prevent painful, adverse self-fulfilling market dynamics from emerging."

According to Pill, the Monetary Policy Committee (MPC) will make a "comprehensive assessment" of the macroeconomic and monetary situation before the November meeting, in order to decide on future monetary policy steps.

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