On this photo illustration, the British pound is seen displayed.
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The British pound on Wednesday morning recovered losses barely following a Financial Times report that said the Bank of England is privately signaling a willingness to increase its emergency bond-buying program.
The report, which cited anonymous sources, got here on the heels of comments by BOE Governor Andrew Bailey who said the central bank would end the rescue program on Friday as planned.
Speaking at an event organized by the Institute of International Finance in Washington, D.C., late Tuesday, Bailey said that “a part of the essence, I feel, of a financial stability intervention is that it’s clearly temporary.”
The Bank of England didn’t immediately reply to CNBC’s request for comment on the FT’s report outside of office hours.
The pound fell as little as $1.0922 in Asia’s morning trade before popping to $1.106 after the FT report was published. It was trading at $1.0988 by 6 a.m. London time Wednesday.
Calls for extension
The Pensions and Lifetime Savings Association called for an extension to the BOE’s intervention, which is as a consequence of end on Oct. 14.
“A key concern of pension funds for the reason that Bank of England’s intervention has been that the period of buying mustn’t be ended too soon, for instance, many feel it must be prolonged to the following fiscal event on 31 October and possibly beyond,” the PLSA said in a press release Tuesday.
If bond purchasing is stopped, “additional measures must be put in place to administer market volatility,” it added.
But Bailey said late Tuesday that the BOE doesn’t intend to proceed buying bonds to stabilize the market.
“We’ve announced that we might be out by the top of this week. We expect the rebalancing should be done,” he said.
“And my message to the funds involved and all of the firms involved managing those funds: You have three days left now. You have to get this done.”
— CNBC’s Elliot Smith and Jenni Reid contributed to this report.
