The Bank of England has been forced to step in for a second day running to boost its emergency bond-buying scheme.
The emergency move came as it warned a sell-off of government bonds was a “material risk” to financial stability.
The Bank said it would buy a wider range of bonds to help “restore orderly market conditions”.
On Monday, government borrowing costs rose sharply after the Bank increased the amount of bonds it was buying before the scheme ends on Friday.
The Bank is hoping its latest move will guard against “dysfunction” in the debt market.
It said it had seen a “further significant repricing” of government bonds since the start of the week.
The Bank said it would now buy a wider range of bonds as well as continue to buy bonds as part of the original emergency measures it launched on 28 September in the wake of Chancellor Kwasi Kwarteng’s mini-budget which spooked markets.
The move came after its announcement on Monday that it would double the amount of bonds it would buy and chancellor Kwasi Kwarteng brought forward the date of his economic plan to balance the government’s finances in an attempt to reassure investors.
However, investors remained nervous and sent long-term government borrowing costs up close to the level they were at after the mini-budget.
In the wake of the September mini-budget, the pound slumped to a record low, government borrowing costs surged and the Bank of England was forced to step in and take emergency action after the dramatic market movements put some pension funds at risk of collapse.