The Bank of England has warned of “a material risk to UK financial stability” and “dysfunction” in part of the pension market despite its unprecedented intervention late last month.

It comes after the cost of government borrowing continued to rise yesterday.

Gilt yields, the interest rate payable on government bonds, rose on Monday, near the 5% highs of 27 September, the day before the Bank made its intervention.

The rise came despite the Bank’s Monday announcement of a potential doubling of spending in its emergency bond buying and extended support for a part of the pensions market.

Tuesday morning’s announcement extended its intervention again. Now the Bank will begin to purchase index-linked gilts, government bonds with interest payments in line with inflation.

The move has been made as a result of “further significant repricing of UK government debt” particularly in index-linked gilts.

Related posts:

Mortgage borrowing takes largest monthly leap as economy finds new gear Ex-Watchstone chief ends three-year search for Innovate UK boss Canadian giant OMERS plots bid for CityFibre stake July inflation measure usually used to set annual rail fare rises is highest in ten years Amazon to open large department stores in the US Travel hopes, retail slump, four-day week Treasury paves way to compensate Post Office scandal’s forgotten 555 Sub-postmasters who launched Horizon scandal legal fight secure extra compensation Next warns of acceleration in price hikes and £85m sales hit amid Russia-Ukraine conflict Bitcoin rallies slightly but still set for record losing streak Ryanair still discounting as it warns recovery in demand remains ‘fragile’ Bank of England governor warns of ‘apocalyptic’ food prices as he defends inflation policy