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The Bank of England has dropped plans to sell long-dated bonds next week in response to recent financial market turmoil and will instead sell shorter maturity gilts in its “quantitative tightening” programme of asset sales.
The announcement, which follows a sharp sell-off in the price of UK sovereign bonds with 10- and 30-year maturities, means the BoE will sell only short-dated bonds in an auction on April 14 instead of the long-maturity bonds it had initially planned to offload.
The BoE said on Thursday it had made the decision “in light of recent market volatility”, adding that it “intends to reschedule the long-maturity auction to the following quarter” as it seeks to keep reducing the bonds held in its asset purchase facility “as evenly as possible across maturity sectors”.