Bank of England strives to reassure bond market after tax cut storm

The Bank of England intends to suppress the storm in Britain's bond markets, noting it would buy back a national debt needed to revive the economy after new British Prime Minister Liz Truss' tax cut reforms. These measures provoked turmoil in the country's market. 

As for Friday, Finance Minister Kwasi Kwarteng presented a plan to cut taxes, along with providing financial support for energy bills. Notably, all is financed by increased government borrowings. As a consequence, mortgage lending markets have been frozen, UK pension funds have gotten rid of government bonds, and corporate borrowing costs have skyrocketed. 

Quarteng's objectives for drastic tax cuts and deregulation to bring the British economy out of its long stagnation came to be seen as a return to the Thatcher and Reaganomics doctrines of the 1980s.

Such moves caused panic among investors. Most of the Conservative Party were also concerned about these measures.

Foreign government officials, along with international financial organizations, criticized the presented plans. 

The International Monetary Fund urged Truss to change course, despite its rare interference in the policies of G7 member states.

One of the largest U.S. investment firms, PIMCO, also said public confidence in sterling to be undermined.

Spanish Minister of Economic Development and Digital Transformation Nadia Calvino, in turn, expressed the opinion rather sharply, calling the current policy a disaster.