BoE announces market support measures

LONDON, Oct 10 (AFP): The Bank of England on Monday said it was launching a temporary facility aimed at easing liquidity pressures that arose after the UK government's budget shocked markets.
The BoE "announces additional measures to support market functioning", said a statement, adding that the central bank was ready to increase the size of its UK government bond purchases under an emergency measure due to end Friday.
The BoE said it is launching a Temporary Expanded Collateral Repo Facility, enabling "banks to help to ease liquidity pressures facing" client funds beyond the end of this week.
Markets have been spooked by Britain's recent budget announcement from the government of new Prime Minister Liz Truss.
The unveiling of debt-fuelled tax cuts aimed at supporting Britain's recession-threatened economy sent UK bond yields soaring and the pound tumbling to a record-low against the dollar.
That triggered the emergency buying of long-dated bonds by the BoE.
The central bank has so far made purchases of so-called gilts totalling around £5 billion ($5.5 billion), far less than its £65-billion limit.
The purchases are "to restore market functioning in long-dated government bonds and reduce risks from contagion to credit conditions for UK households and businesses," the BoE stressed in Monday's statement.