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UK bond liquidity improves only slightly after BoE intervention

09/29/2022 | 06:44am EST
Economy illustrations in London

(Reuters) - The spread between bid and ask prices on UK government bonds, a key liquidity indicator, was only marginally tighter on Thursday than a peak seen before a Bank of England intervention to calm markets, according to ING Bank research citing Tradeweb data.

The Bank of England said on Wednesday it would buy some 65 billion pounds of long-dated bonds to calm the biggest sell-off in the country's debt in decades in reaction to its new government's tax cut plans.

The average of bid-ask spreads on 2-, 5-, 10- and 30-year gilts was at 6.225 basis points on Thursday, according to ING, down marginally from a peak 6.4 basis points seen on Tuesday, before the intervention. Tuesday's peak was the highest on record in ING's dataset going back to 2017.

The spread was at just 2.15 bps last Thursday, a day before the government's mini-budget, the data showed.

(Reporting by Yoruk Bahceli; editing by Dhara Ranasinghe)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) -0.05% 0.5521 Delayed Quote.3.59%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) -0.02% 0.60412 Delayed Quote.3.81%
EURO / BRITISH POUND (EUR/GBP) 0.03% 0.85757 Delayed Quote.2.21%
INDIAN RUPEE / BRITISH POUND (INR/GBP) 0.07% 0.010006 Delayed Quote.1.42%
ING GROEP N.V. -0.24% 11.416 Real-time Quote.-6.75%
UK 10Y CASH -0.01% 3.1562 Delayed Quote.249.70%
US DOLLAR / BRITISH POUND (USD/GBP) -0.03% 0.81367 Delayed Quote.10.37%
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