There are rumours about pension insolvency doing the rounds as the reason for the BOE intervention today. That doesn't make sense because pensions aren't (or shouldn't be) holding leveraged positions. They can be underfunded so maybe something was lost in translation there...
In any case, Bloomberg reports that it was collateral calls and warnings of contagion that prompted the move, which makes total sense.
The Bank had been warned by investment banks and fund managers in recent days that the collateral requirements could create a situation in which forced selling drove up the yield on UK debt, the person said, asking not to be named discussing the central bank’s deliberations.
The BOE has been warned there would be more forced selling this afternoon, that's why we're getting today's hastily-arranged QE action.
UK 30-year yields are down to 4.09% from a high of 5.09% earlier. That's a hefty profit for anyone who bought three hours ago.
