To all the central bank fans here (there are dozens of us! dozens of us!): The Bank of England has to temporarily ease and tighten at the same time.
They will do gilt purchases at an "urgent pace" and on "whatever scale is necessary" to "restore orderly market conditions." This intervention "will be strictly time limited" and "will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided."
However, going forward they will still "not hesitate to change interest rates by as much as needed to return inflation to the 2% target sustainably in the medium term."
The chain of reasons why includes the new government fighting inflation with... checks notes... fiscal... stimulus?
One thing leads to another in a way I am too tired to try and summarize further. Soon we arrive at:
What’s probably worrying the BOE is the prospect of a fire sale of assets by UK pension funds to meet margin calls as the value of their gilt investments has plummeted. Those funds have loaded up on long-dated debt to match their liabilities to policyholders, and may have attempted to juice their returns by dabbling in derivatives.
Words I don't love reading in the same sentence: "margin calls" and "pension funds."