As part of a major revision to its QT programme, the Bank of England has
abandoned plans to sell long-dated gilts. The £488bn portfolio will be gradually
wound down by September 2034 under the proposal. The BoE would retain about
£120bn of gilts maturing in 2049 or later and match them to future banknote
issuance; roughly £222bn maturing before 2035 would be run down; and the
remaining £146bn maturing between 2035 and 2049 would be sold at up to £20bn a
year, with some sales potentially routed directly to the UK DMO. Governor Bailey
said the arrangement preserves monetary policy independence and aims to maximize
value while minimising cost and risk during implementation. All planned QT
auctions are suspended while the BoE consults the UK DMO on sale terms, with the
pause running until April next year. The delay, intended to avoid competing with
Government gilt issuance, is expected to ease near-term gilt yield pressure.
