After a year of febrile UK politics, an incoming Chancellor announced a highly radical “Budget” in the planning of which he had intentionally sidelined all the usual consultees. Sterling had slid in the week’s run up and continued to plummet. Long-term gilt yields, already rising, continued to do so. City rumour whispered that a large insurer had begged for central help.
The Bank announced a £65 bn gilt time-limited buy-back programme. Press rhetoric of “collapse,” “bailout” and “emergency” was coupled with naming pension funds and “LDI” as villains or perpetrators.
The political heat became incandescent as Budget-supporters and -detractors from their grandstands attributed blame in many directions. The Bank’s rescue actions were co-terminous with the careers of Chancellor and Prime Minister. “In war, the first casualty is truth”: What part did “LDI” really play?
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