LONDON, Oct 18 (Reuters) – The Bank of England is likely to further delay the start of its October 31 billion-pound bond sale to help stabilize government bond markets after Britain’s failed ‘mini’ budget, according to the Financial Times reported on Tuesday.
Amid the turmoil in financial markets, the BoE had already postponed the start of a program to sell part of its £838 billion ($954.90 billion) of government bonds originally scheduled to start on October 6.
The pound was briefly higher against the US dollar in the report but was unchanged at $1.1353 as of 7:22 am (0622 GMT).
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The FT said it had learned senior BoE officials had come to the view that a delay was needed after assessing the gilts market as “very distressed” in recent weeks, a view supported by its Financial Policy Committee was endorsed.
No one in the Bank of England press office was immediately available to comment on the report.
BoE Governor Andrew Bailey said in a speech on Saturday that the central bank is not currently using its bond holdings as an active monetary policy tool and its key interest rate remains its main monetary policy tool.
UK financial markets have come under pressure since former Finance Minister Kwasi Kwarteng announced a series of tax cuts on September 23 without giving details on how they would be paid for.
On Monday, incoming Treasury Secretary Jeremy Hunt scrapped most of Prime Minister Liz Truss’ economic plan and scaled back her massive energy support program in a historic about-face to try to stem a dramatic loss of investor confidence.
UK bond prices rose following his announcement.
($1 = 0.8776 pounds)
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Reporting by Akriti Sharma in Bengaluru and William Schomberg in London; Additional reporting by Kevin Buckland in Tokyo; Edited by Clarence Fernandez, Sam Holmes and Andrew Heavens
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