9/28/2022, 1:10 PM (Source: TeleTrader)
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UK gilt yields plummet after BoE announcement

Yields on United Kingdom government bonds (gilts) plunged on Wednesday after the announcement made by the Bank of England (BoE) that the institution will temporarily buy long-dated bonds to restore "orderly market conditions."

Previously, the bank said it was "closely monitoring developments in financial markets" due to the significant revaluation of UK and global financial assets. The emergency action means the institution will buy government bonds to stabilize the market and bring down yields after reaching multiyear records.

At 12:52 pm CET, immediately after the announcement, the return on the 30-year gilt dropped by 62 basis points to 4.369%. Meanwhile, the yield on the 10-year gilt decreased by 29 basis points to 4.192% at 12:56 pm CET, and a minute later, the yield on the 2-year gilt fell by 24 basis points to 4.514%.

Baha Breaking News (BBN) / JG