The Bank of England will start selling assets on 1 November as it gets ready to end the quantitative easing programme that saw it accumulate about £850bn in government bonds, it announced in a statement on Tuesday (18 October).
The BoE will start selling stock of British government bonds, but will not sell any longer-duration gilts this year. Instead, sales in 2022 will be in short- and medium-maturity sectors, of bonds up to 20 years.
30-year gilts, one of the longest-dated UK government bonds, were at the centre of the recent sell-off and concerns about the pensions industry, which led the Bank to implement an emergency purchasing programme.
BoE responds to Treasury Committee on expanded emergency bond buying
In order to avoid conflicting with a government fiscal statement on October 31, the central bank said that it was delaying the start date for the introduction of its so-called quantitative tightening programme by one day from its original schedule.
"The Bank will continue to monitor market conditions closely, and where appropriate factor that into the design of its sales operations," the Bank of England said in the statement.
Bank of England gilt operation comes to an end
The BoE added that it expects to conduct gilt sales during the fourth quarter "at a similar size and frequency as had been previously announced", with any shortfall made up in 2023 or later.
The Bank's statement comes after the Financial Times reported on Tuesday the Bank was likely to delay the asset sales. However, the central bank refuted this, saying this was inaccurate.
