LONDON, Oct 18 (Reuters) – The Bank of England is likely to further delay the Oct. 31 start of its sales of billions of pounds of government bonds to help stabilise the government bond markets after Britain’s failed “mini” budget, the Financial Times reported on Tuesday.
Amid turmoil in financial markets, the BoE had already pushed back the start of a scheme to sell some of its 838 billion pounds (USD954.90 billion) of government bond holdings, which was originally due to begin on Oct. 6.
The pound briefly rose against the US dollar on the report but was flat at USD1.1353 at 7:22 am (0622 GMT).
The FT said it had learned that top officials at the BoE had come to the view that a delay was needed after judging the gilts market to be “very distressed” in recent weeks, a view backed by its Financial Policy Committee.
No one at the Bank of England’s press office was immediately available to comment on the report.
BoE Governor Andrew Bailey said in a speech on Saturday that the central bank was not using its stock of bonds as an active tool of monetary policy at present and its benchmark Bank Rate remained its primary instrument of policy.
British financial markets have been under strain since former finance minister Kwasi Kwarteng announced the string of tax cuts with no details of how they would be paid for on Sept. 23.
On Monday, new finance minister Jeremy Hunt scrapped most of Prime Minister Liz Truss’s economic plan and scaled back her vast energy support scheme, making a historic policy U-turn to try to stem a dramatic loss of investor confidence.
British bond prices rose after his announcement.
(USD1 = 0.8776 pounds)
(Reporting by Akriti Sharma in Bengaluru and William Schomberg in London; Additional reporting by Kevin Buckland in Tokyo; Editing by Clarence Fernandez, Sam Holmes and Andrew Heavens)
This article originally appeared on reuters.com