"Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability."
The Bank says the purchases will be carried out on "whatever scale is necessary to effect this outcome".
In a statement on Monday, the Governor announced that the Bank is "monitoring developments in financial markets very closely in light of the significant repricing of UK and global financial assets".
The Bank has today announced that "this repricing has become more significant in the past day – and it is particularly affecting long-dated UK government debt".
The Bank of England said: "Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability. This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy.
"In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses."
On 28 September, the Bank of England’s Financial Policy Committee noted the risks to UK financial stability from dysfunction in the gilt market. It recommended that action be taken, and welcomed the Bank’s plans for temporary and targeted purchases in the gilt market on financial stability grounds at an urgent pace.
The Bank said that these purchases will be strictly time limited and are intended to tackle a specific problem in the long-dated government bond market. Auctions will take place from today until 14 October and the Bank added that the purchases "will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided".
In light of current market conditions, the Bank’s Executive has postponed the beginning of gilt sale operations that were due to commence next week. The first gilt sale operations will take place on 31 October and proceed thereafter.
A HM Treasury spokesperson said: "The Bank of England, in line with its financial stability objective, carefully monitors financial markets and any potential risk to the flow of credit to the real economy, and subsequent effects on UK households and businesses.
"Global financial markets have seen significant volatility in recent days. The Bank has identified a risk from recent dysfunction in gilt markets, so the Bank will temporarily carry out purchases of long-dated UK government bonds from today (28 September) in order to restore orderly market conditions. These purchases will be strictly time limited, and completed in the next two weeks. To enable the Bank to conduct this financial stability intervention, this operation has been fully indemnified by HM Treasury.
"The Chancellor is committed to the Bank of England's independence. The Government will continue to work closely with the Bank in support of its financial stability and inflation objectives."
Ben Laidler, global markets strategist at social investment network, eToro, commented: "Desperate times call for desperate measures and that's exactly what we've seen from the Bank of England today. In an attempt to put out the fire that's been raging since last week's mini budget, the Bank has come to the rescue of the plunging UK bond market, which had started to shut down the UK's mortgage market and be much more damaging than the headlines of weaker Sterling.
"The temporary purchase of long-dated gilts reverses the Bank's recently announced 'quantitative tightening' bond sales plan, and has already seen bond prices rise. But this still leaves yields over 1% higher than last week, implying an extra £1,400 annual cost for an average sized variable rate mortgage."
