Although Prime Minister Liz Truss has canceled her intention to implement massive tax cuts, the Bank of England (BOE) is still continuing to provide additional support to the UK market.
This is because, the impact of the UK government's announcement two weeks ago is still being felt by the market which has witnessed the sudden fall of the pound currency to an all-time low.
Most recently, the central bank announced the expansion of its emergency bond purchase operation to restore the country's troubled bond market.
The BOE will expand its purchases of UK government bonds, also known as gilts, by buying up to £5 billion of inflation-linked bonds (index-linked gilts)** every day from Tuesday to Friday.
**These bonds have a rate and principal payment linked to inflation where investors receive coupon payments that vary every six months based on the rate of inflation.
The move marks the second extension of an extraordinary bailout package by the BOE after it raised the limit for its daily bond purchases on Monday that will end on Friday.
Two weeks ago, the BOE announced its first intervention after the UK government's unveiled budget plans have brought 'catastrophe' to the country's financial markets.
