Friday, September 30, 2022
HomeEconomyBank of England to sell £8.7bn of government bonds in Q4

Bank of England to sell £8.7bn of government bonds in Q4

LONDON (Reuters) – The Bank of England said on Thursday it would sell about 8.7 billion pounds ($9.8 billion) of government bonds in the 2022 final quarter, becoming the first

Bank of England Monetary Policy Committee voted unanimously to reduce its 838 £1 billion gilt holdings

in the next A billion pounds in a few months , roughly in line with the plans announced last month.

The BoE stopped reinvesting the proceeds of maturing gilts in February, when its holdings peaked at 120 £1 billion, but The longer average tenor means aggressive selling is required to reduce holdings at the pace MPC is now seeking.

About half of the planned reduction 20 – £1 billion – sometimes called Quantitative Tightening (QT) – will be Conducted through the Bank of England’s regular gilt auctions.

The Bank of England will hold gilt auctions from 3 October to 8 December, The programme size is 580 £1 million each.

Gilts will be offered in mature barrels from 3-7 years, 7-20 years and 20 year, the Bank of England sells gilts at the best prices.

The Bank of England said it did not expect the program to have a significant impact on the market, but given recent market volatility in Phnom Penh and costly government measures to subsidize energy bills and cut taxes, some analysis The teacher expressed concern.

“The start of active QT adds to an increasingly challenging supply outlook. Depends on how much new fiscal measures are needed in 2022/120 (relative to 2023/24 and beyond), we forecast gilts net Supply could rise to 120 one billion pounds this year,” HSBC economists Liz Martins and Simon Wells said.

The Bank of England reiterated that it will closely monitor market conditions and reserves the right to change sales plans but will do so with a “high standard”, the MPC aims to Review sales levels annually.

($1=0.8888 GBP)

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