London Daily

Focus on the big picture.
Monday, Jul 13, 2026

Bank of England to stop government bond-buying scheme today

Bank of England to stop government bond-buying scheme today

Pressure on gilts - UK government bonds - eased on Thursday as the Bank of England sought to steady market sentiment by increasing its bond-buying activity.

The Bank of England is set to stop its government bond-buying scheme today after attempting to reassure the UK's financial markets.

The Bank launched the unprecedented intervention after the chancellor's mini-budget caused chaos within the markets, as well as a potential pension pots crisis.

It promised to buy up to £65bn in government bonds - which are known as gilts - from those who wanted to sell them.

The government issues bonds to raise money for public spending, often used to service pension funds and the life insurance market.

Banks and big financial institutions that buy the gilts from the government at auction can sell them on to smaller financial institutions, traders or investors on the open market.

The price - or rate - at which they are bought and sold will be higher if investors think the government is able to repay the debt when the bond matures.

But when confidence in the UK economy falls, so does the bond price.

This increases the yield, the rate of interest or cost of borrowing, as investors seek to protect their money.

How much did the BoE spend on bonds?


The scheme launched by the Bank of England was designed to restore confidence in the government's finances - increasing bond prices and decreasing the yields it has to pay on them.

Initially, the Bank's intervention seemed to push down yields on these gilts.

But on Wednesday, yields had surged as high as 5.1%, the same level they reached before the Bank's initial intervention.

As part of the programme, the Bank bought around £4.35bn of bonds on Wednesday and £4.7bn on Thursday in an increased effort to help soothe the markets.

It brings the total bond buying to £17.8bn.

Ultimately, it has helped to prop up pension funds at a time when they were already under a lot of strain from global financial pressures.

Another U-turn expected


Chancellor Kwasi Kwarteng and Prime Minister Liz Truss are now under pressure to reinstate a planned increase in corporation tax from April.

On Thursday night, the chancellor announced he would be returning to the UK from the US earlier than planned, amid growing expectation of a government U-turn on corporation tax.

The widely anticipated move appeared to reassure the finance industry, after Bank of England Governor Andrew Bailey spooked the markets by insisting that the emergency support would not be extended.

Mr Kwarteng has also that there would be "no real cuts to public spending", appearing to double down on comments made in the House of Commons by the PM on Wednesday.

The government's plans revolve around securing an increase in economic growth - with a target of an annual rise of around 2.5% in gross domestic product.

The crucial date will be 31 October, when the forecasts presented by the Office for Budget Responsibility alongside the chancellor's statement will give an assessment on whether such a plan is realistic.

Newsletter

Related Articles

0:00
0:00
Close
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Netflix Weighs Always-On Channels, Bundles and Short-Form Video
Passenger Is Pulled Partly Outside Ryanair Jet After Window Fails Mid-Flight
Innovation-led growth strategy
Public service reform pressure
Defence and industrial security
Labour leadership transition and economic reset
Northern England Pushes for Greater Influence in Britain’s Future Economic Model
UK Technology Strategy Focuses on Life Sciences, Digital Innovation and Research Investment
Britain and United States Maintain Focus on Pharmaceuticals Cooperation and Industrial Growth
UK Public Services Face Continued Pressure as Government Promises Visible Improvements
Regional Economic Power Becomes Key Theme in Britain’s Next Political Phase
Britain Expands Support for Small Businesses as Firms Seek Better Access to Finance
UK Economy Remains Central Political Challenge as Cost of Living and Growth Concerns Persist
National Health Service Introduces New Workplace Reviews to Improve Conditions for Healthcare Staff
UK Life Sciences Sector Secures More Than Three Billion Pounds in Investment to Support Innovation
Britain Strengthens Defence Strategy as Security Concerns Reshape Military and Industrial Policy
Andy Burnham Promises Stronger UK Defence Industry and Expanded Domestic Production
UK Government Faces Difficult Spending Choices as Labour Leadership Transition Approaches
Rachel Reeves Warns Andy Burnham of Immediate Economic Challenges After Expected Leadership Change
Andy Burnham Prepares to Lead UK Government With Plans for Regional Power Shift and Economic Reset
Government Creates Emergency Support Scheme for Financially Struggling Universities
United Kingdom Replaces Traditional Farm Subsidies With Payments Linked to Environmental Performance
National Grid Reports First Week of Electricity Generation Without Fossil Fuels
United Kingdom Financial Regulator Introduces Tougher Capital Rules for Cryptocurrency Exchanges
Belfast Harbour Expands Operations to Attract Investment Through United Kingdom and European Union Market Access
Scottish Government Threatens Legal Challenge Over Westminster Cuts to North Sea Transition Funding
United Kingdom Accelerates Trans-Pennine High-Speed Rail Project Linking Northern Cities
United Kingdom Secures Ten Billion Pound Investment for Cambridge Quantum Computing Campus
Port Talbot Steelworks Wins Support for Green Hydrogen Transition and Protection of Industrial Jobs
United Kingdom Sends Royal Navy Carrier Strike Group to Indo-Pacific as Regional Security Focus Expands
National Health Service Expands Artificial Intelligence Diagnostics Across England to Reduce Screening Backlogs
United Kingdom Launches Fifty Billion Pound Infrastructure Fund to Accelerate Housing and Construction
UK Medical Chiefs Update Health Guidance to Promote Everyday Physical Activity
Office of Communications Keeps Wikipedia Under Review Under UK Online Safety Rules
UK Defence Ministry Expands Deep-Strike Capability Through Precision Missile Programme
Russell Group Universities Warn Funding Cuts Could Damage NHS Workforce Training
UK Parliament Calls for National Emergency Broadcast as Heatwave Conditions Intensify
UK and Netherlands Strengthen Naval Cooperation With New Amphibious Defence Partnership
UK Defence Ministry Joins International Missile Programme With One Hundred and Ninety Million Pound Investment
Bank of England Warns Middle East Conflict and AI Risks Could Pressure UK Economy
UK Government Introduces New Rules to Limit Foreign Influence in Political Donations
UK and France Prepare Naval Mission to Protect Shipping Through Strait of Hormuz
United States Pressures UK to Increase Defence Spending at NATO Summit
Bank of England Warns Artificial Intelligence Investment Boom Could Create Financial Stability Risks
Bank of England Begins Direct Oversight of Critical Technology Providers Supporting UK Finance
Andy Burnham Set to Become UK Prime Minister After Labour Leadership Race Clears Path to Downing Street
Scottish Fishing Industry Calls for Emergency Support Amid Rising Costs
UK Supports Stronger European Response to Russian Actions in Ukraine
Devon and Cornwall Police Release Suspect in Ann Widdecombe Murder Investigation
×