Pension trade body urges Bank of England to extend bond-market support until end of October

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A U.K trade body for the pensions industry has urged the Bank of England to extend its emergency action to purchase index-linked bonds to prop up the market.

A U.K. trade body for the pensions industry has urged the Bank of England to extend its emergency action to purchase bonds to prop up the market.

The Pensions and Lifetime Savings Association welcomed the Bank of England’s intervention on Tuesday — it’s now added a new type of bond it will buy — but has warned that many pension funds are concerned that the emergency period “should not be ended too soon” and urged the central bank to prolong the aid until Oct 31 “and possibly beyond.”

That’s the second move this week to calm down bond volatility. On Monday, the Bank of England said it would expand the size of its daily gilt purchases and launch further measures to taper the end of its emergency bond-buying plans. “A key concern of pension funds since the Bank of England’s intervention has been that the period of purchasing should not be ended too soon, for example, many feel it should be extended to the next fiscal event on Oct. 31 and possibly beyond, or if purchasing is ended, that additional measures should be put in place to manage market volatility,” they said.

 

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