The Bank of England’s enforced £65bn intervention to calm the stressed gilt market in the wake of the UK government’s unsettling “fiscal event” on 23 September has thrown a harsh, critical spotlight on liquidity.

Rarely can the managers of the UK’s huge institutional funds have been confronted with such uncertainty. This is not just the volatility seen in the wake of the global financial crisis, the Covid-19 pandemic or Russia’s unprovoked invasion of Ukraine. UK economic policy is embarking on a journey into the unknown.

Whoever emerges as the victor from the Conservative Party’s seemingly interminable leadership contest later this week will face an in-tray at Downing Street that will be overflowing with urgent government business.

The government threw the City a weighty tome of summer reading the day before MPs left Westminster for the summer when it published the long-awaited Financial Services and Markets Bill on 20 July.

The unprecedented chaos of the last week, as the government imploded, left the country bewildered and many struggling to keep up with the whirlwind pace of events. As the dust settles, at least for a brief interlude, we find many new faces in key roles affecting the City and the insurance market, writes David Worsfold, contributing editor.

The eyes of UK insurers may be firmly fixed on the push by the Treasury to persuade the Prudential Regulation Authority to loosen some of the strict rules inherited from Solvency II but elsewhere in the world the debate is moving on. In doing so, it has opened a fault line between US insurers and their European counterparts.