Pound falls after UK bank chief rules out extending help

LONDON (AP) — The pound sank against the dollar early Wednesday after the Bank of England governor confirmed the bank won't extend an emergency debt-buying plan introduced last month to stabilize financial markets.

Andrew Bailey said the program will end on Friday as scheduled. The pound fell by almost 1% to just below $1.10 after Bailey spoke, before rallying slightly. After the government’s September “mini-budget,” the currency hit a record low of $1.03.

“My message to the (pension) funds involved – you’ve got three days left now. You have got to get this done,” he said. “Part of the essence of a financial stability intervention is that it is clearly temporary.”

The central bank stepped in after the British government on Sept. 23 announced plans for 45 billion pounds ($50 billion) in tax cuts without saying how it would pay for them. The announcement spooked financial markets and sent the pound plunging to a record low against the dollar.

The Bank of England intervened to prop up the bond market and stop a wider economic crisis that particularly threatened pension funds.

Analysts say pension funds lobbied the central bank to extend the program by two weeks, but Bailey stuck to the timeline in an appearance at the annual meeting of the Institute of International Finance in Washington.

The market turmoil has caused pain for many Britons — especially prospective homebuyers, who have seen mortgage rates soar on the increased prospect of a big rate hike from the central bank when it meets next month.

It has also put intense political pressure on the Conservative government of Prime Minister Liz Truss, who took office in early September with a promise to boost growth through tax cuts and deregulation.

In an effort to ease concerns, Treasury chief Kwasi Kwarteng said...