the bank of england intervened, buying up those debts in unlimited quantities, which brought down those interest rates, but they remain high. high interest rates mean that the value of the government debt effectively an iou called a bond decreases. for some long term loans, their worth effectively halved, with severe consequences for one sector in particular. this was a dramatic surprise intervention by the bank of england to save a trillion pounds corner of the pensions industry. ordinarily, these funds buy up government debts because they re safe as houses no risks but their value fell so rapidly in two days that they had to be saved in this way. but this also helps the government at a tricky time by finding a customer the bank of england for the tens of billions of pounds of debt that they have to raise. so this is an emergency intervention. it is a crisis. and whilst this will help buy some time, it doesn t solve the underlying problem, which is the government s economi
interest bond? is a 30 year iou and the interest rate on that should reflect what you interest rate on that should reflect what you think the average interest rate should be over 30 years, not ust rate should be over 30 years, not just the next couple of years, and if you just the next couple of years, and if you think just the next couple of years, and if you think they are going to get control if you think they are going to get control of if you think they are going to get control of inflation, really it should control of inflation, really it should only be the sort of shorter term debt that goes up a lot while you shorter term debt that goes up a lot while you still have high inflation and what while you still have high inflation and what you have interest rates going and what you have interest rates going up and what you have interest rates going up. that long term debt should not be going up. that long term debt should not be going up to five or 6%, assuming
not? , , ., uncomfortable balancing act, is it not? , ., ., , uncomfortable balancing act, is it not? , ., ., not? and remember you already had the other mega not? and remember you already had the other mega balancing not? and remember you already had the other mega balancing act - not? and remember you already had the other mega balancing act which l the other mega balancing act which governments overall or having to do because governments overall or having to do because you have got the central banks because you have got the central banks trying to put their feet on the brakes to stop inflation but also governments pumping money into the economy at least to help those households that are facing high energy households that are facing high energy bills. so there is a lot of introductory policy happening or policy introductory policy happening or policy that s got tension. i think what policy that s got tension. i think what they policy that s got tension. i think what the
the right policy for growth, what is the right policy for growth, what is the reaction? th the right policy for growth, what is the reaction? the right policy for growth, what is the reaction? in the city of london, ou would the reaction? in the city of london, you would exoect the reaction? in the city of london, you would expect when the reaction? in the city of london, you would expect when you - the reaction? in the city of london, you would expect when you have i the reaction? in the city of london, | you would expect when you have the biggest tax cuts for the city two great this which normally goes down well to greet this in a way which normally goes down well, tax cuts, but we have not seen that sort of reaction in the city and we have seen the opposite. we have seen a meltdown down there especially on the bond markets, so the bond markets is where the government borrows money and it does so by issuing a note which it you saying, i ou £1000 and issuing a note which it y