Andrew Bailey said the spiral of leverage was worrying because funds borrow money in short-term markets to buy long-term debt - Samuel Corum/Bloomberg Risky hedge funds are propping up Britain’s government debt markets and creating fresh dangers to financial stability, Andrew Bailey has warned. The Bank of England Governor said on Tuesday that traders now “dominated” the ownership of the UK’s £3tn market for bonds – known as gilts – increasing the risk of rapid sales if they seek quick profits. Mr Bail ...

Bank of England data show hedge funds had borrowed £99.9bn from banks to recycle back into gilts as of the end of November - Andrew Aitchison/Getty Images Hedge funds have placed a £100bn bet on gilts that the Bank of England believes has left Britain dangerously exposed to a bond market meltdown. Andrew Bailey will face questions from MPs this week after Threadneedle Street expressed alarm over trades that allow hedge funds to borrow huge amounts of cash from banks using gilts as collateral. The Gover ...