Asset Purchase Facility: Gilt Sales – Market Notice 21 September 2023

Market notice

At its September 2023 meeting, the MPC voted to reduce the stock of gilts held in the APF for monetary policy purposes by £100bn over the period from October 2023 to September 2024, to a total of £658 billion.

The Bank set out in the consolidated APF gilt sales Market Notice published on 1 September 2022 that it would publish a quarterly schedule for the sales of gilts held in the APF for monetary policy purposes. The details and schedule for the Q4 2023 sales of such gilts are set out in this Market Notice which covers the period from 2 October 2023 to the week commencing 11 December 2023. 

In Q4 2023, the Bank will continue to sell gilts evenly across short, medium and long maturity buckets. These sectors are defined as gilts with a residual maturity of between: 3-7 years (short), 7-20 years (medium); and over 20 years (long).

During Q4 2023, the Bank intends to hold 4 gilt sale auctions in each of the short, medium and long maturity sectors, with a planned size of £670 million per auction. The dates for the individual auctions are specified in the table below. Auctions will commence on 2 October for short maturity gilts, 16 October for medium maturity gilts and 9 October for long maturity gilts.

In the consolidated APF gilt sales Market Notice published on 1 September 2022 the Bank noted that it expected to hold an auction in each maturity bucket once per fortnight. Reflecting the total sales proceeds required to meet the MPC’s 12-month target, our approach in Q4 2023 will be to operate one APF gilt auction per week in most weeks. This means that an auction will be held in each maturity bucket at least every four weeks.

The Bank will continue to monitor the impact of its gilt sales programme on market conditions, and reserves the right to amend its schedule, including the gilts to be sold and the size of its auctions, or any other aspect of its approach at its sole discretion. As part of that, the Bank will continue to monitor whether the current approach of selling gilts evenly across short, medium and long maturity sectors in sales proceeds terms remains appropriate.

Other than as amended in this Market Notice, the detailed operational parameters and participation requirements set out previously will apply to these gilt sales.

The Bank expects to announce the sales schedule for Q1 2024 at 4.30pm on 15 December 2023.

Table: APF gilt sales auction calendar – October to December 2023