Bow says it has no means left to protect the market from what is a political party.
If it intervenes more, it makes the situation worse.
The doom loop scenario cannot be allowed to play out anymore as its not fixing the problem. Its a short term fix which requires a political solution not a sticky plaster.
If the BoE continue the risk is all the pensions will go pop. And it won't matter if there is a protection scheme because that will go pop too as there will be insufficient funds.
Hence the BoE have had to say there is nothing more they can do. The pension funds can not continue to finance pension through this type of funding because they are effectively insolvent and cannot pay it back. And the government is just making it worse.
The BoE making such a statement is unprecedented as its a challenge to government. Its not supposed to be political yet saying to the government 'you are fucking up' is a political act. But also one that a responsible BoE have no choice but to say for the sake of the economy.
Its been known for a while that final salary pensions couldn't continue because pension funds weren't big enough. Hence they closed then and everyone after got worse deals to fill some of that gap. Now that gap has got bigger... So how does the gap get filled?
Its scary for pensioners who don't know if they will get what they thought. And it's scary for working age people who don't know if they will get anything and may have to pay extra tax on top of that, as well as needing to save more. Keeping in mind that inflation.
I think the fear here is that inflation could run away too.
BoE are suggesting unless the government change course we are headed for either something akin to Iceland or worse - an Argentina type scenario.
Its hard to see how the Chancellor can survive tomorrow and tbh its hard to see how Liz Truss will survive at this point. How on earth do the Tory manage that? They can't get rid of her by force by the end of the week either.
This isnt just about money. There is a risk of civil unrest if things go tits up.
This being pointed out by the BoE also terrifies markets. It suggests London isn't a safe place to invest. Which for a government set on a plan for growth kinda fucks the plan which relies on economic confidence in government.
Doom loop as a phrase doesn't really cut the mustard.
Taxes MUST go up. And cut probably will have to happen now, which might have been avoidable without the mismanagement.
That condemns the Tories to politicial oblivion. The GE will be a formality. It doesn't mean Labour have better policies or their improval ratings are going up. It means Truss has fucked it so badly its irredeemable. This is actually scary because it means the next government will also have a lack of accountability and oversight too. No one should be happy about this, regardless of political persuasion.
Everyone crapping themselves about nukes is looking in the wrong direction.