The Bank of England’s governor has ruled out extending its bond-buying support for pension funds beyond Friday’s deadline, prompting a dramatic fall in the value of the pound.
Andrew Bailey told an event in Washington that funds had “three days left… to get this done” after a series of interventions to support the “dysfunctional” market in the wake of the wider meltdown over the government’s mini-budget.
The latest action, on Tuesday, saw the Bank snap up index-linked gilts, government bonds with interest payments in line with inflation.
They are heavily used by pension funds.
The Bank had already been buying up long-dated gilts – a type of government bond that make up a large proportion of pension pots – to steady market jitters.
They saw yields – the rate demanded to hold government debt – shoot up as pension schemes tried to raise hundreds of billions through firesales of government and corporate bonds to meet cash calls – the latest coming from providers of so-called liability-driven investment strategies.
They are demanding funds put up more money to support new and older hedging positions.
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Mr Bailey told an event organised by the Institute of International Finance that the intervention must be temporary.
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“We have announced that we will be out by the end of this week. We think the rebalancing must be done.
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“And my message to the funds involved and all the firms involved managing those funds: You’ve got three days left now. You’ve got to get this done.”
Industry body the Pensions and Lifetime Savings Association had earlier urged the Bank to extend the bond-buying programme until 31 October – the new date for the publication of the government’s debt plan – at least.
Mr Bailey’s clear stance on the issue saw the pound, which had been trading higher on the day versus the dollar earlier, sink by more than one and a half cents to below $1.10.
The government bond market is – in the UK and elsewhere – best thought of as the bedrock of the financial system.
The government borrows lots of money each year at very long durations and these bonds are bought by all sorts of investors to secure a low but (usually) reliable income over a long period of time.
Compared to other sorts of assets – such as the shares issued by companies or for that matter cryptocurrencies – government bonds are boring. Or at least, they’re supposed to be boring.
They don’t move all that much each day and the yield they offer – the interest rate implied by their prices – is typically much lower than most other asset classes.
But recently the UK bond market (we call them gilts as a matter of tradition, short for gilt-edged securities, because in their earliest embodiment they were pieces of paper with golden edges) has been anything but boring.
Gilt yields, the interest rate payable on government bonds, rose on Monday, near the 5% highs of 27 September, the day before the Bank made its first intervention.
They fell when news of the latest operation was announced but long-dated yields later rose higher again.
That took place when the Bank revealed it had bought £1.947bn of index-linked bonds on Tuesday, adding that it had rejected £466.9m of offers to sell to the central bank.
Market turmoil that stemmed from the mini-budget led to the unprecedented intervention from the regulator to prevent part of the pension market collapsing as the cost of interest on gilts surged.
Russ Mould, investment director at AJ Bell, said of the scheme’s expansion before Mr Bailey’s remarks: “The Bank of England hopes to avoid a crisis in the market by being a willing buyer of bonds from pension funds who are under pressure.
“These pension funds will welcome today’s move, but whether the broader market shares the same enthusiasm remains to be seen.
“The key sticking point is that the support measures are only scheduled to last until Friday.
“Will that be long enough, or will the Bank of England extend the support scheme? Extending it could go one of two ways – the market either applauds the move and breathes a sigh of relief or it gets even more worried, thinking that the extra time suggests the crisis is more severe than originally thought.”
Sophisticated drones sending “overwhelming amounts” of drugs and weapons into prisons represent a threat to national security, according to an annual inspection report by the prisons watchdog.
HMP chief inspector of prisons Charlie Taylor has warned criminal gangs are targeting jails and making huge profits selling contraband to a “vulnerable and bored” prison population.
The watchdog boss reiterated his concerns about drones making regular deliveries to two Category A jails, HMP Long Lartin and HMP Manchester, which hold “the most dangerous men in the country”, including terrorists.
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Mr Taylor said “the police and prison service have in effect ceded the airspace” above these two high-security prisons, which he said was compromising the “safety of staff, prisoners, and ultimately that of the public”.
“The possibility now whereby we’re seeing packages of up to 10kg brought in by serious organised crime means that in some prisons there is now a menu of drugs available,” he said. “Anything from steroids to cannabis, to things like spice and cocaine.”
“Drone technology is moving fast… there is a level of risk that’s posed by drones that I think is different from what we’ve seen in the past,” warned the chief inspector – who also said there’s a “theoretical risk” that a prisoner could escape by being carried out of a jail by a drone.
He urged the prison service to “get a grip” of the issue, stating: “We’d like to see the government, security services, coming together, using technology, using intelligence, so that this risk doesn’t materialise.”
Image: The report highlights disrepair at prisons around the country
The report makes clear that physical security – such as netting, windows and CCTV – is “inadequate” in some jails, including Manchester, with “inexperienced staff” being “manipulated”.
Mr Taylor said there are “basic” measures which could help prevent the use of drones, such as mowing the lawn, “so we don’t get packages disguised as things like astro turf”.
Responding to the report, the Prison Advice and Care Trust (PACT) said: “The ready access to drugs is deeply worrying and is undermining efforts to create places of rehabilitation.”
Mr Taylor’s report found that overcrowding continues to be what he described as a “major issue”, with increasing levels of violence against staff and between prisoners, combined with a lack of purposeful activity.
Some 20% of adult men responding to prisoner surveys said they felt unsafe at the time of the inspection, increasing to 30% in the high security estate.
Andrea Coomber, chief executive of the Howard League for Penal Reform, said: “This report is a checklist for all the reasons the government must prioritise reducing prison numbers, urgently.
“Sentencing reform is essential, and sensible steps to reduce the prison population would save lives.”
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The report comes after the government pledged to accept most of the recommendations proposed in the independent review of sentencing policy, with the aim of freeing up around 9,500 spaces.
Those measures won’t come into effect until spring 2026.
Prisons Minister Lord Timpson said Mr Taylor’s findings show “the scale of the crisis” the government “inherited”, with “prisons dangerously full, rife with drugs and violence”.
He said: “After just 500 prison places added in 14 years, we’re building 14,000 extra – with 2,400 already delivered – and reforming sentencing to ensure we never run out of space again.
“We’re also investing £40m to bolster security, alongside stepping up cooperation with police to combat drones and stop the contraband which fuels violence behind bars.”
The daughter of a Post Office victim has told Sky News she suffered “dark thoughts of suicide” in the years after her mother was accused of stealing.
Kate Burrows was 14 years old when her mother, Elaine Hood, was prosecuted and subsequently convicted in 2003.
The first public inquiry report on the Post Office – examining redress and the “human impact” of the scandal – is due to be published today.
“I’ve suffered with panic attacks from about 14, 15 years old, and I still have them to this day,” Kate said.
“I’ve been in and out of therapy for what feels like most of my adult life and it absolutely categorically goes back to [what happened].”
Image: Kate and Rebecca with their mother, Elaine
Kate, along with others, helped set up the charity Lost Chances, supporting the children of Post Office victims. She hopes the inquiry will recognise their suffering.
“It’s important that our voices are heard,” she said. “Not only within the report, but in law actually.
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“And then maybe that would be a deterrent for any future cover-ups, that it’s not just the one person it’s the whole family [affected].”
Her sister, Rebecca Richards, who was 18 when their mother was accused, described how an eating disorder “escalated” after what happened.
“When my mum was going through everything, my only control of that situation was what food I put in my body,” she said.
Image: Elaine with her husband
She also said that seeing her mother at court when she was convicted, would “stay with me forever”.
“The two investigators were sat in front of my dad and I, sniggering and saying ‘we’ve got this one’.
“To watch my mum in the docks handcuffed to a guard… not knowing if she was going to be coming home… that is the most standout memory for me.”
The sisters are hoping the inquiry findings will push Fujitsu into fulfilling a promise they made nearly a year ago – to try and help the children of victims.
Image: The siblings were teenagers when their mum was unfairly prosecuted
Last summer, Kate met with the European boss of the company, Paul Patterson, who said he would look at ways they could support Lost Chances.
Despite appearing at the inquiry in November last year and saying he would not “stay silent” on the issue, Kate said there has been little movement in terms of support.
“It’s very much a line of ‘we’re going to wait until the end of the inquiry report to decide’,” she said.
“But Mr Patterson met us in person, looked us in the eye, and we shared the most deeply personal stories and he said we will do something… they need to make a difference.”
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Fujitsu, who developed the faulty Horizon software, has said it is in discussions with the government regarding a contribution to compensation.
The inquiry will delve in detail into redress schemes, of which four exist, three controlled by the government and one by the Post Office.
Victims of the scandal say they are hoping Sir Wyn Williams, chair of the inquiry, will recommend that the government and the Post Office are removed from the redress schemes as thousands still wait for full and fair redress.
A Department for Business and Trade spokesperson said they were “grateful” for the inquiry’s work, describing “the immeasurable suffering” victims endured and saying the government has “quadrupled the total amount paid to affected postmasters”, with more than £1bn having now been paid to thousands of claimants.
Anyone feeling emotionally distressed or suicidal can call Samaritans for help on 116 123 or email jo@samaritans.org in the UK. In the US, call the Samaritans branch in your area or 1 (800) 273-TALK
CCTV and police bodycam footage allegedly showing three police officers being assaulted at Manchester Airport has been played to jurors.
Mohammed Fahir Amaaz, 20, and his brother, Muhammad Amaad, 26, are said to have struck out after police were called to the airport on 23 July last year, following Amaaz allegedly headbutting a customer at a Starbucks in Terminal 2.
Minutes later, three police officers approached the defendants at the paystation in the terminal’s car park.
A jury at Liverpool Crown Court today watched CCTV footage from opposite angles, which captured what the prosecution says was a “high level of violence” being used by the siblings.
The prosecution says Amaaz resisted as officers tried to move him to arrest him, and Amaad then intervened.
Junior counsel Adam Birkby suggested Amaaz threw 10 punches, including one to the face of PC Lydia Ward, which knocked her to the floor.
His brother Amaad is then said to have aimed six punches at firearms officer PC Zachary Marsden.
Amaaz also allegedly kicked PC Marsden and struck firearms officer PC Ellie Cook twice with his elbow.
He is said to have punched PC Marsden from behind and had a hold of him, before PC Cook discharged her Taser.
Image: Mohammed Fahir Amaaz (left) and Muhammed Amaad (right) arrive at the court with their lawyer. Pic: PA
The bodycam and CCTV footage, submitted as evidence by the prosecution, allegedly shows the officers’ arrival in the Terminal 2 car park and their attempts to arrest the siblings, as well as their exchanges with them.
PC Ward can be heard saying “Oi, you b*****d” in footage from her bodycam, the prosecution evidence appears to show.
She then appears to fall to the floor and screams.
PC Cook, who is pointing her Taser at one of the defendants, then allegedly says: “Stay on the floor, stay on the floor whatever you do.”
“Get back, get back,” PC Ward appears to say.
The bodycam footage, shown to the jury by the prosecution, shows PC Marsden, who is also pointing his Taser, appear to approach the defendant who is lying on the ground and kick out at him.
Mr Birkby said: “Mr Amaaz, while prone, lifts his head towards the officers. PC Marsden kicks Mr Amaaz around the head area.
“PC Marsden stamps his foot towards the crown of Mr Amaaz’s head area but doesn’t appear to connect with Mr Amaaz.”
Amaaz denies three counts of assault occasioning actual bodily harm to the three police officers and one count of assault to Abdulkareem Ismaeil, the customer at Starbucks.
Amaad denies one count of assault occasioning actual bodily harm to PC Marsden.