Pension funds 'would have collapsed today' if Bank of England hadn't have stepped in, experts claim

Pension funds 'would have collapsed today' if emergency measures had not been taken by the Bank of England, it has been claimed. The Bank of England was forced to step in with a £60billion buy-up of government debt to stop a mass collapse of pension funds.

The move to calm the chaos in financial markets follows turmoil for the pound and UK government bonds caused by the Chancellor’s tax-cutting mini-budget. The Bank announced it was stepping in to buy Government bonds – known as gilts – at an 'urgent pace' to try and bring the surging yields under control as they spiralled higher, sending UK public borrowing costs soaring.

It said it would buy bonds 'on whatever scale is necessary', but has so far resisted calls to deliver an emergency interest rate rise after the pound fell to an all-time record low against the US dollar on Monday.

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The Bank announced the plans to launch the temporary programme to buy gilts, effectively stepping in to provide a backstop in the market and halt a sell-off. It made the move after the yield – or interest rate – charged on long-dated gilts soared to levels not seen for many years.

The Bank said the rise threatened to see financial conditions tighten in the UK, cutting the flow of credit to households and businesses, if not addressed. It is also understood that the Bank’s action follows concerns over the balance sheet strength of many UK pension funds caused by the gilt sell-off, sparking fears over their solvency.

Concerns over Britain’s economic policies have sparked a gilt rout, sending the yield on 10-year gilts to over 4 per cent – a level not seen since the 2008 financial crisis. Government bond