Bank of England warns of long-term UK debt

By Gokhan Ergocun

ISTANBUL (AA) - Saying that repricing affected the UK's long-term government debt, the Bank of England (BoE) warned that if this "dysfunction" continues or worsens, it could cause a significant risk to the country's financial stability.

"This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy," the bank stressed.

The bank will carry out temporary purchases of this debt starting Wednesday to restore market conditions.

"The purchases will be carried out on whatever scale is necessary to effect this outcome," it added.

The bank, which raised its policy rate by 215 basis points since last December to 2.25%, said its monetary policy committee will not hesitate to change the policy rate as much as needed to bring inflation down to the target level of 2%.

The country's annual inflation rate is currently at around 10%.