The Pensions and Lifetime Savings Association (PLSA) welcomed today’s move by the Bank of England to start buying inflation-linked bonds on top of other gilts, calling it a “positive additional intervention” in its attempt to keep the market operating in an orderly way.
But the industry watchdog warned that many funds are worried about what happens after Friday, when the Bank is due to end its daily bond purchases.
It said some funds want the support extended until chancellor, Kwasi Kwarteng, has revealed his medium-term fiscal plan at the end of the month.
“A key concern of pension funds since the Bank of England’s intervention has been that the period of purchasing should not be ended too soon” it said.
The PLSA said that market confidence remained low and urged pension funds to take steps now to re-balance their portfolios and protect their strategies in uncertain times.