UK Pensions Regulator monitoring markets, welcomes BoE bond buying

Woman holds British pound banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/Illustration

LONDON, Sept 28 (Reuters) - Britain's Pensions Regulator is monitoring financial markets closely for their impact on the funding of defined benefit, or final salary, pension schemes, a spokesperson said on Wednesday.

Pensions schemes have been heavily selling gilts in recent days after market falls caused by UK tax cut concerns triggered calls for collateral payments on the schemes' gilt derivatives positions, analysts and pensions advisers said.

The Bank of England said on Wednesday it would buy as many long-dated government bonds as needed between now and Oct. 14 to stabilise financial markets, after a slump in British gilt prices since the government's fiscal statement on Friday. read more

"We welcome steps announced by the Bank of England to restore orderly conditions through temporary purchases of long-dated UK government bonds," the Pensions Regulator spokesperson added.

The regulator reiterated comments this week that the schemes and their advisers should review the resilience and liquidity of their investments, risk management and funding arrangements. read more

Reporting by Carolyn Cohn Editing by Gareth Jones

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