Bank of England intervenes in bond market after massive sell-off

The central bank said it was monitoring the "significant repricing" of U.K. and global assets in recent days.

The Bank of England will temporarily buy long-dated bonds in order to calm the market turmoil caused by the mini-budget.

After the new fiscal policy announcements, investors fled British fixed income markets and the U.K. gilt yields were on course for their biggest monthly rise since 1957. The measures included large swathes of unfunded tax cuts that have been criticized by the International Monetary Fund.

The central bank said it was keeping a close eye on the repricing of U.K. and global assets.

There would be a material risk to the UK's financial stability if the market continued to get worse. The Bank of England said that this would lead to an unwarranted tightening of financing conditions.

The Bank of England is ready to restore market functioning and reduce any risks to U.K. households and businesses.

The Bank will begin buying long-dated U.K. government bonds on Wednesday in order to calm the markets.

The Bank's Financial Policy Committee decided to take immediate action after acknowledging that the gilt market was a risk to the country's financial stability.

The first gilt sales, originally scheduled for Monday, will now take place on October 31, the Bank said.

The Treasury was "fully indemnified" by the operation and the Finance Minister was committed to the Bank of England's independence, according to a U.K.Treasury spokesman.

The government will work closely with the Bank to support its objectives.

The market notice detailing the operational details of the program will be published soon.

The yields on U.K. 30-year gilts and 10-year gilts dropped after the announcement.