LONDON, Sept 28 (KUNA) -- The Bank of England (BoK) said on Wednesday it would buy as much government debt as needed to restore financial stability after chaos triggered by the new government's fiscal policy.
The (BoE) announced an emergency move that would prevent the turmoil in markets from spreading through the country and seizing up credit flows, while the Treasury said it would fully indemnify the operations.
In a statement, the bank said that the purchase operations, starting today and continue until October 14, will be carried out on "any necessary scale" in order to achieve the required results.
(BoE) stated that it "watches developments in the financial markets closely in light of the re-pricing of large financial assets," noting that it will not delay in changing interest rates as necessary".
According to the BBC, economists confirm that the actual cost of government for long borrowing periods have risen significantly over the past few days, coinciding with investors' continuing concern about the British economy.
The financial markets are still reacting negatively to the government's announcement to raise tax cuts, the largest and sharpest in fifty years.
On Thursday, the Bank of England announced the raise of interest rate to 2.25 percent, the highest level since 2008, for the seventh time since the beginning of this year in order to curb the significant rise in inflation rate, which currently stands at 9.9 percent. (end)