Sterling slips back with euro on persistent UK fiscal angst despite BoE bond-buying

By Kevin Buckland TOKYO (Reuters) - Sterling retreated again on Thursday from a sharp bounce against the dollar overnight, after the Bank of England announced unlimited bond purchases to shore up Britain's financial markets battered by the government's radical plans to cut taxes. The UK currency jumped the most since mid-June on Wednesday, pulling the euro with it, after the BoE conducted the first of its emergency bond-buyback operations, worth more than 1 billion pounds. It committed to buying as many long-dated gilts as needed until Oct. 14. Sterling was 0.51% lower at $1.0831 as of 1200 GMT, returning some of the previous session's 1.41% rally. The euro weakened 0.32% to $0.97065, following Wednesday's 1.51% surge, the biggest since early March. Sterling had plummeted to a record low of $1.0327 on Friday as investors delivered a scathing verdict on the new government's plan for record tax cuts funded by a massive increase in borrowing, at the same time as the BoE is aggressively tightening monetary policy to rein in rampant inflation. Europe's shared currency had plunged to a new two-decade low of $0.9528. "The BoE's bond purchases may temper the UK government's borrowing costs but have not resolved the tensions...

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