What happens when Quantitative Easing (QE) meets an illiquid market? It looks as if the Bank of England just found out.
As part of the BoE’s new £70 billion stimulus program, designed to offset any concerns investors may have about the effect of Brexit on the UK’s economy, the BoE announced last week that it is going to acquire a further £60 billion of UK gilts.
Koo: QE Has Failed In Europe, The UK And Japan
The first auction in this latest wave of central bank easing took place on Tuesday of this week, but it seems that market participants aren’t as willing to participate in the program as the BoE’s policymakers first interpreted.
A lack of buyers
The Tuesday auction was targeting...
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