Bank of England set to review leverage rules for government bonds

The Bank of England could give Britain’s government bond market a boost this week and lower public borrowing costs by more than £1 ​billion ($1.3 billion) a year, banks say — but some former regulators warn a change in rules to achieve this would increase financial risks.

The BoE is reviewing how its leverage ‌rules operate — which banks argue discourage them from holding public debt — after loosening its main capital requirement in December. It is due to give an update on its plans in its...