Bank's Tucker says that reaction to US tapering is a "warning shot across our bows"

The Bank of England's Paul Tucker has said that the reaction to Fed comments about tapering - a reduction in the rate at which the US central bank increases the size of the monetary base - have been a "warning shot across our bows".

Tucker said that the market response showed how nervous markets have become, and that the financial system is over excited. While the volatility is an alert, it said this doesn't mean we're at the cliff edge.

Speaking on Bank activity, Tucker said that the Monetary Policy Committee has done a good job of underpinning demand, but that he does not yet know where bond yields might settle.

Andrew Bailey said that banks have shifted from their leverage ratio plans, with some slippage on banks building up capital buffers. Bailey said that a three per cent leverage ratio should be achieved as soon as possible.

Dr Donald Kohn made clear his belief that rate increases are "some way off" in the UK, as the global economy remains weak.