U.K. bond market turmoil highlights tilt toward “fiscal dominance”

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The turmoil in the British bond market is the backdrop for a battle between the nation's politicians and its central bank over who really runs the U.K. economy.

"The purpose of these purchases

Governments — or as they're described by central bankers, "fiscal authorities" — control taxing, spending and borrowing decisions. Under this system, central banks are supposed to have independence from the politicians running the country. That's because sometimes — for instance, when inflation is high — the bank has to do politically unpopular things, like raising rates, starting recessions and throwing people out of work.

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