Bank of England governor confirms UK was close to financial meltdown on Channel 4

The Bank was forced to step in “quickly” and “decisively” to mitigate a “very real threat to financial stability” after former Chancellor Kwasi Kwarteng outlined £45 billion tax measures. 

Speaking in an interview with Channel 4, Andrew Bailey said: "We certainly reached a point where markets were very unstable, and these were core markets, this is the Government bond market, which is in many ways the most core of all.

PA (Image: PA)

Andrew Bailey says UK was 'hours' from financial meltdown after mini-budget

“We certainly reached a point where markets were very unstable, and these were core markets, this is the Government bond market, which is in many ways the most core of all,” he added.

“And it was becoming unstable and it was affecting … pension funds for instance, and how they were operating.

“And our worry was that when you get into that situation, this can easily spread very rapidly and then you have a huge job on your hands to get it back under control.

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“So we had to step in quickly and we had to step in quite decisively.”

When asked if the UK was days, or even hours, away from potential total meltdown, Mr Bailey said: “I think at that point when we intervened, I can tell you that the messages we were getting from the markets were that it was hours.”

The governor added that it was “hard to compare” the autumn’s turmoil with the global financial crisis in 2008, saying: “I’m not sure I could give you an exact comparison, but this felt and was a very real threat to financial stability.”