<div><span style="font-size: 1rem;">The Bank of England has announced that it will step in to calm markets after the government's tax-cutting plans sparked a fall in the pound and caused borrowing costs to surge.</span><br></div><div><br></div><div>It warned that if the market volatility continued there would be a "material risk to UK financial stability".</div><div><br></div><div>The Bank said it would buy government bonds on a temporary basis to help "restore orderly market conditions".</div><div><br></div><div>The pound hit a record low on Monday following the chancellor's mini-budget.</div><div><br></div><div>Markets have also warned interest rates could spike after borrowing costs jumped, leading a number of mortgage providers to suspend mortgage deals.</div><div><br></div><div>The Bank said the bond purchases would be carried out on "whatever scale is necessary" to ease investor concerns.</div><div><br></div><div>It added that the plan would be fully indemnified by the Treasury and that the purchases would be "time limited".</div><div><br></div><div>"The purchases will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided," it said in a statement.</div><div><br></div><div>Government bond yields - the effective cost of government borrowing - especially at longer borrowing durations, have spiked in the past few days as investors continue to worry about the UK economy.</div><div><br></div><div>It comes after the government pledged $45bn worth of tax cuts, funded by borrowing, as part of a plan to boost economic growth.</div><div><br></div><div>Concerns about the plans affordability knocked investor confidence in the UK economy, driving the pound to a record low of $1.03 against the dollar on Monday. - BBC</div><div><br></div><div>bnbd24/fas</div>