FTSE indexes gain after BoE holds rates steady, pauses gilt sales
The central bank will keep £120 billion of bonds permanently and sell the rest over eight years, while consulting on direct sales to the Debt Management Office.
- On Thursday, the Bank of England paused all government bond sales for six months and halted long-dated gilt auctions entirely, while keeping interest rates at 3.75%.
- Governor Andrew Bailey announced a multi-year plan to offload most of the bank's remaining £488 billion of gilts by 2034, with the Monetary Policy Committee voting 9-0 in favor.
- British government bond prices rallied sharply following the announcement; the 30-year gilt yield fell 11.8 basis points to 5.7414% on Thursday, marking its lowest level in over two weeks.
- The bank will pause all sales until April while consulting with the Debt Management Office on selling gilts directly at market prices rather than holding auctions.
- Inflationary concerns persist, prompting analysts to anticipate further rate hikes. "No doubt hikes will be coming, most likely as soon as November," said Ed Hutchings, head of rates at Aviva Investors.
12 Articles
12 Articles
Bank of England confirms major policy shake-up amid borrowing cost fears
The Bank of England has confirmed a major change to how it will influence the economy in a move that has seen borrowing costs plummet.Earlier this week, the central bank's Monetary Policy Committee (MPC) voted to keep the base rate at 3.75 per cent despite inflationary concerns.However, analysts claim the most consequential development from the policymakers' latest meeting reform of its approach to quantitative tightening.Rather than continuing …
Bank of England Halts Long-Dated Gilt Sales in Quantitative Tightening Shift
The Bank of England has halted sales of long-dated gilts in its quantitative tightening program and revised its bond portfolio reduction plan to prioritize market stability. The move reflects concerns over liquidity, pension fund risks, and subdued economic conditions while still allowing gradual balance sheet shrinkage through short-dated maturities. This pragmatic adjustment does not signal a return to QE.
Foreign holdings declined from US Treasury bonds to $9.25 trillion, while the Bank of England reformulated its bond sales plan as global debt market pressures escalated.
Borrowing costs fall after Bank of England 'surprises' markets with bond sale change
The government’s borrowing costs fell on Thursday, after the Bank of England voted to hold interest rates and chose to end its long-term gilt sales in a major overhaul of its bond sale programme. The yields on both short- and long-term government bonds fell in the aftermath of the decision, as traders pared back bets [...]
Bank of England halts long-dated gilt sales, rewrites plan to unwind QE
By David Milliken and Andy Bruce LONDON, Sept 17 (Reuters) - The Bank of England paused sales of British government bonds for the next six months and halted sales of long-dated gilts entirely as it set out a multi-year programme to offload most of its ...
Coverage Details
Bias Distribution
- 57% of the sources are Center
Factuality
To view factuality data please Upgrade to Premium
