The Treasury Chairman , Andrew Tyrie , has warned the Bank of England that a decline in the liquidity of the bond market would pose a threat to financial stability . Tyrie said there would be a " vicious circle of declining liquidity and financial stability " when bond yields rise and prices fall in a response that is highly likely to occur in the economy . Over the summer the famously rock solid German bonds, known as bunds, recorded a 10-year yield of 0.89%, jumping from 0.49% a week prior. He also expressed concerns over the impact of unwinding the quantitative easing programme , which has resulted in the Bank of England holding £ 391bn of gilts , which is nearly a quarter of all outstanding gilts .
The Treasury Chairman , Andrew Tyrie , has warned the Bank of England that a decline in the liquidity of the bond market would pose a threat to financial stability . Tyrie said there would be a " vicious circle of declining liquidity and financial stability " when bond yields rise and prices fall in a response that is highly likely to occur in the economy . He also expressed concerns over the impact of unwinding the quantitative easing programme , which has resulted in the Bank of England holding £ 391bn of gilts , which is nearly a quarter of all outstanding gilts .