The Bank of England said on Wednesday it would buy some £65bn of long-term bonds to ease the country’s biggest debt run-off in decades in response to its new government’s tax cut plans.
Average bid-ask spreads on 2-, 5-, 10- and 30-year gilts were 6.225 basis points on Thursday, according to ING, down slightly from the peak of 6.4 basis points seen on Tuesday, before the intervention. . Tuesday’s spike was the highest on record in ING’s data set dating back to 2017.
The spread was just 2.15 basis points last Thursday, a day before the government’s mini-budget, the data showed.