Bank of England shows its readiness to act confidently in the face of market crisis

According to an announcement recently made by the Bank of England, the regulator shows its readiness to change the interest rate and continues to carefully monitor the situation in the market, especially after the fall of the British national currency to a record low and the drop in bond prices as a response to the government’s new financial plan.

On Friday, Kwasi Kwarteng, finance minister of England, allowed the British pound, as well as the government bonds to fall die to the influence of a so-called mini-budget policy, initially introduced for supporting the economy by funding tax cuts and increasing in government borrowing.

There were hypotheses in the financial markets, assuming that the Bank of England might increase the interest rate urgently as it already did last week, when the rate was increased from 1.75% to 2.25%.

“The Bank carefully monitors the situation in the financial markets, given the current substantial revaluation of assets”, – reported Andrew Bailey, Governor of the Bank of England.

Also, he added that “the Bank without any hesitation will change the interest rate by as much as needed, pursuing the goal to bring inflation back to the target level of 2% in the medium term. All actions will be done in accordance with the Bank’s remit”.

Reuters and the Bank of England conducted an analysis that shows that the 10-year British government bonds are currently moving towards their biggest fall in any calendar month since 1957.