However, the BoE Governor said pension funds had until Friday to solve liquidity problems. As a result, the 20-year gilt yield reached 4.9% yesterday, and 30-year yields hit 4.8%.
The FTSE 100 dropped 0.9%, further weighed down by weak economic data. UK Industrial production fell 1.8% on a monthly basis and by 5.2% annually in August, compared to forecasts of a 0.1% monthly drop and a 0.6% annual gain.
This morning, the blue-chip index was down 0.5%. Housebuilder Taylor Wimpey dropped 5.0% as it traded ex-dividend.
All eyes will be on U.S. inflation data, due later today, as many investors believe it could influence the Federal Reserve’s pace of rate hikes.
Things to read today:
Kwarteng Warns BOE to Blame if UK Markets Slide Next Week (Bloomberg)
BoE governor gambles by insisting bond-buyng operation will end (Financial Times)
Liz Truss in Fresh Peril as senior Tory MPs round on her over economy (The Guardian)