LONDON (AP) — The Bank of England moved Wednesday to halt a slide in British government bonds that posed a “material risk to UK financial stability” after political leaders’ plans to slash taxes and increase borrowing spooked investors and sent the pound tumbling.

The emergency intervention means the central bank will buy government bonds from Wednesday through Oct. 14 in an effort to stabilise the market and drive down the soaring cost of government borrowing.

“The bank is monitoring developments in financial markets very closely in light of the significant repricing of U.K. and global financial assets,” the bank said in a statement. “This repricing has become more significant in the past day — and is particularly affecting long-dated U.K. government debt.”

The move came after the International Monetary Fund issued a rare warning to a major world economy, urging Britain’s new government to “reevaluate” sweeping new tax cuts that may fuel inflation and are likely to increase economic inequality.

Yields on the 10-year government bonds, which measure the return buyers get on their investment, fell following the central bank’s announcement, after spiking in recent days.

“The move that bank officials have made to step in now … smacks of a bit of panic and also of frustration that the government appears to be digging in its heels, reluctant to perform a political U-turn,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Prime Minister Liz Truss’s government on Friday unveiled a 45 billion-pound ($48 billion) package of tax cuts in an effort to spur economic growth. But the plan wasn’t accompanied by spending cuts, or even an independent cost estimate, raising concerns that it would swell government debt and add to inflation that is already running at 9.9%, close to a 40-year high.

In response, the British pound fell to a record low against the U.S. dollar on Monday, to $1.0373, amid investor concern about the government’s policies, which also include borrowing billions to help shield homes and businesses from soaring energy prices.

The British currency later recovered, but it sagged Wednesday morning, trading at $1.057, after the rare IMF warning. The central bank intervention did not boost it.

“Given elevated inflation pressures in many countries, including the U.K., we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy,” the IMF said in a statement. “Furthermore, the nature of the U.K. measures will likely increase inequality.”

The Bank of England has refrained from an emergency interest rate hike to offset the slide in the pound in the currency markets. It sought to stabilise markets earlier this week, saying it was prepared to raise interest rates “as much as needed” to rein in inflation.

But the bank’s next scheduled meeting is not until November, and the lack of immediate action did little to bolster the pound. It was able to step in with bond purchases because its Financial Policy Committee has a mandate to ensure the stability of the financial system.

The British government said it has fully underwritten the central bank’s intervention on government bonds, known as gilts.

“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 in order to restore orderly market conditions,” the Treasury said in a statement.

U.K. Treasury chief Kwasi Kwarteng was meeting Wednesday with executives from investment banks as the government seeks to soothe markets alarmed by its economic plans.

The British currency is down 4% since Friday, and the pound has fallen 20% against the dollar in the past year.

The turmoil is already having real-world effects, with British mortgage lenders pulling hundreds of offers from the market amid expectations the Bank of England will sharply boost interest rates to offset the inflationary impact of the pound’s recent slide.

The U.K. government has resisted pressure to reverse course but says it will set out a more detailed fiscal plan and independent analysis from the Office for Budget Responsibility on Nov. 23.

“The Nov. 23 budget will present an early opportunity for the U.K. government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high income earners,” the IMF said.

In response, the U.K. Treasury said the government was “focused on growing the economy to raise living standards for everyone.”

The November statement will set out further details of the government’s plan and ensure that debt falls as a share of gross domestic product “in the medium term,” a spokeswoman said.