Sterling credit investors have enjoyed a buoyant few months since the market crash in March. Aside from the dramatic improvement in market liquidity, credit spreads (the yield difference between corporate bonds and government bonds) have nearly halved from a high of 2.25% in late March to 1.29% at the end of September.
A major factor in this positive change of circumstances has been a £10bn Bank of England (BoE) buyback programme, known as the Corporate Bond Purchase Scheme. The Scheme dates back to August 2016, when the BoE sought to deal with the aftermath of the Brexit vote. The BoE restarted it in April this year in an effort to allay fears over the impact of the Covid-19 pandemic.