BoE's Hauser: Mini-budget caused 'full-scale liquidation event' for pension funds

LONDON (Reuters) - The fallout in gilt markets from the British government's mini-budget was a "full-scale liquidation event" for pension funds, whose managers were calling the Bank of England with increasing alarm, the central bank's Executive Director for Markets said.

"This was a situation that went from 'we're ringing you to let you know' to shouting on the phone to us, within two days," Andrew Hauser told lawmakers on parliament's Treasury committee on Wednesday. "This was a full-scale liquidation event."

Pension funds were forced to offload billions of pounds of UK government bonds, or gilts, at distressed prices last month after the government's announcement of tax cuts sent yields soaring, triggering margin calls on derivatives designed to protect the funds against movements in rates.

(Reporting by William Schomberg, writing by Sachin Ravikumar, Editing by Kylie MacLellan)