Bank of England Governor Andrew Bailey claims that the chaos that caused investors to flee from UK assets during the previous administration has already disappeared.
Back then, investors were frantically getting rid of UK assets, including pound and government bonds, which put some pension funds at risk of collapse, forcing the Bank to intervene.
Bailey said that the panic brought by the budget program that triggered outrage because it outlined tax cuts has all but passed, so mortgage rates in the markets have fallen. However, rebuilding customer returns is still in progress.
The Bank bought £19.3 billion worth of securities, while all bonds had been sold and the profit was about £3.8 billion. "All the profits go to the Treasury. That's about £3.8 billion," Bailey said. "The profits will be offset by losses on the sale of bonds bought as part of the standard quantitative easing plan," he added.
Bailey also noted that the proposed changes to insurance sector capital rules, such as more lenient rules for insurers, would pose a risk to policyholders but not to the financial system as a whole.
