Bailey: Monetary policy must be unwaveringly committed to returning inflation to target

• Policymakers need to reinforce core financial markets so future shocks can be absorbed rather than amplified.
• Core markets must become more resilient.
• The greater absorption of government debt has brought greater fragility with it.
• With shocks occurring more often and underlying growth weaker, a string of such shocks pushes government debt higher.
• Using the balance sheet to cushion a severe downturn becomes far harder.
• Markets are turning volatile.
• Price action is still some way from normal, but there are no signs of illiquidity or stress.

Bailey's use of core markets should be read as gilts and market plumbing.

The sudden sense of urgency stands out. The climb in yields has refocused central bankers on their core roles and highlighted the risks they need to manage.

The 10-year gilt yield has risen 4 basis points today to 5.49%.