In a letter to the Commons Treasury committee explaining the intervention, the Bank’s deputy governor for financial stability, Jon Cunliffe, suggested the largest market movements came after the chancellor’s mini-budget. Threadneedle Street stepped in last week after a collapse in the pound to the lowest level against the dollar in history and as interest rates on UK government bonds rose to the highest level since the 2008 financial crisis. The central bank said the meltdown was at risk of rippling through the UK financial system, which could have then caused “excessive and sudden tightening of financing conditions for the real economy”. “As a result, it was likely that these funds would have to begin the process of winding up the following morning,” the Bank said. Had the Bank not intervened with a promise to buy up to £65bn of government debt, funds managing money on behalf of pensioners across the country “would have been left with negative net asset value” and cash demands they could not have met.
From mini-budget to market turmoil: Kwasi Kwarteng's week – video timeline
