FAST FIVE: Kwarteng Greenlighted BOE £100 Billion Of Bond-Buying To Quell Market Mayhem
Initially, the BoE pledged £65 billion ($69 billion) to buy long-dated gilts. Kwarteng approved the purchase of long-dated gilts up to £100 billion, according to a letter from Kwarteng to Mel Stride, a member of Parliament who leads the Treasury Committee. “The Bank has requested an extension to the maximum size of the APF by £100 billion to £966 billion,” the Chancellor wrote in a letter dated published on Friday.
Bloomberg pointed out: “The usual exchange of letters between Kwarteng and BOE Governor Andrew Bailey to approve the increase has not yet been published.
The BOE declined to comment on the reason for the size of the request.” So far, since the bond-buying operation began last Wednesday, the BOE offered to purchase £5 billion per market day through Oct.
14, suggesting a total of £65 billion.
The letter to Stride indicates central bankers can increase buying if warranted.