BoE's Pill: bond purchases won't cap long-term rates

Read Moreaims to cure market dysfunction, not cap yields or offer cheaper credit to the government or financial institutions, BoE chief economist Huw Pill said.

Pill said the BoE's promise to buy up to 5 billion pounds of long-dated government bonds each day until Oct. 14 was akin to action to stop a bank run, and its actions would not stop markets' broader repricing of UK debt."They are not intended to cap or control longer-term interest rates or to offer more favourable underlying financing conditions to the institutions involved - or, for that matter, to the government - than would have prevailed in an orderly market environment.

Sterling fell to a record low against the dollar early on Monday, while 30-year gilt yields rose to a 20-year high before the BoE stepped in to back-stop the market. Pill reiterated comments he made on Wednesday that the BoE would fully assess the government's fiscal plans and recent market moves at its next Monetary Policy Committee meeting in November, but that a big rate rise was likely.

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