The Treasury said the government will continue to “work closely” with the Bank of England, after the central bank announced it will launch a temporary UK government bond-buying programme as an emergency move to stave off a “material risk to UK financial stability”.
A Treasury spokesperson said: “The Bank of England, in line with its financial stability objective, carefully monitors financial markets and any potential risk to the flow of credit to the real economy, and subsequent effects on UK households and businesses.
“Global financial markets have seen significant volatility in recent days. The Bank has identified a risk from recent dysfunction in gilt markets, so the Bank will temporarily carry out purchases of long-dated UK government bonds from today in order to restore orderly market conditions.
“These purchases will be strictly time-limited, and completed in the next two weeks. To enable the Bank to conduct this financial stability intervention, this operation has been fully indemnified by HM Treasury.
“The chancellor is committed to the Bank of England‘s independence. The government will continue to work closely with the Bank in support of its financial stability and inflation objectives.”