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BOE Warned of Material Risk for Financial Stability

The Bank of England (BOE) revealed more measures aimed at easing markets rocked by a UK budget as it warned over risks to the financial stability of the country. The week had already seen action taken by BOE, and the government of UK aimed at bringing calm to markets.

The move is in response to increasing UK bond yields and after the pound tumbled to a record low against the dollar since the UK government of new tax cuts announced by Liz Truss in a budget last month. BOE was widening the scope of daily purchases of the UK government bonds.

In a statement, BOE said the latest action will act as a further backstop to restore orderly market conditions. BOE noted that the beginning has seen a further significant repricing of the UK government debt, which BOE will now purchase under its wider operation of bon purchases.

BOE added that dysfunction in this market, and the prospect of self-reinforcing sale dynamics pose a material risk to financial stability of UK. The government of United Kingdom has brought forward key economic forecasts to Halloween, and is hoping not to spike markets further.