Markets up after Bank of England bond-buying pledge

Stock markets in Asia and the US have risen after the Bank of England said it would buy £65bn of UK government bonds.

The announcement came after Friday's mini-budget sparked financial market turmoil and the pound plunged.

Investors also demanded higher returns on government bonds, or "gilts," causing some to slide in value.

Speaking in New York on Wednesday, new UK trade secretary Kemi Badenoch defended the government's economic policies.

However, gains early in the trading day tapered off towards the close with Japan's benchmark Nikkei index ending 0.9% higher, Australia's ASX 200 up by 1.4% and the Kospi in South Korea less than 0.1% higher.

Hong Kong's Hang Seng reversed earlier gains to trade 0.8% lower.

That came after New York's main stock indexes rebounded from a six-day losing streak to end Wednesday's trading day around 2% higher.

The pound was down by around 1% at below $1.08, after earlier making strong gains on Wednesday after the Bank of England's bond-buying announcement.

The currency hit a record low on Monday after chancellor Kwasi Kwarteng unveiled plans to tax cuts, funded by borrowing, in a push to boost economic growth.

• Bank of England steps in to calm markets

• China currency hits record lows against US dollar

Analysts said the Bank's pledge to buy government bonds at an "urgent pace" to help restore "orderly market conditions" had helped to calm market volatility.

"The Bank of England's intervention has supported market optimism," Jun Bei Liu, portfolio manager at Tribeca Investment Partners in Sydney, told the BBC.

"It reversed a previous view of the UK going into a hard landing and debt spiralling out of control," she said.

Yeap Jun Rong, market strategist at online trading platform IG, said the move had "provided some much-needed relief to recent market jitters."

In New York, the UK's international trade secretary used her first visit to the US since taking the role to try to shore up investor confidence.

"You would by now have heard the Bank of England is taking short-term measures to provide stability, as is their job," Ms Badenoch said.

"And we must look at all of this in the context of the fundamentals, which are that the UK economy is strong and we have a plan, a growth plan to cut taxes, promote enterprise, and cut red tape for business," she added.

You may also be interested in: