Asset Purchase Facility: Gilt Purchases - Market Notice 14 January 2016

As set out in the MPC’s statement of 14 January, the MPC has agreed to make £8.4bn of gilt purchases, financed by central bank reserves, to reinvest the cash flows associated with the maturity on 22 January 2016 of a gilt owned by the Asset Purchase Facility (APF).
Published on 14 January 2016
Operations to make these gilt purchases will commence in the week beginning 25 January 2016. The range of gilts eligible for purchase will remain unchanged from previous operations. The Bank intends to hold operations according to the following schedule:

Monday 25 January, gilts with a residual maturity of 3-7 years;
Tuesday 26 January, gilts with a residual maturity of over 15 years;
Wednesday 27 January, gilts with a residual maturity of 7-15 years;
Monday 1 February, gilts with a residual maturity of 3-7 years;
Tuesday 2 February, gilts with a residual maturity of over 15 years;
and Wednesday 3 February, gilts with a residual maturity of 7-15 years.

The Bank intends to purchase evenly across the three gilt maturity sectors. The size of auctions will initially be £1,400mn for each maturity sector.

The Bank will confirm details of the following week’s operations each Thursday at 16.00. The Bank does not currently intend to purchase gilts where the Bank holds more than 70% of the “free float”, i.e. the total amount in issue minus government holdings. The Bank will, however, continue to keep the gilts eligible for purchase by the APF under review.

Other than as amended by this Market Notice, previous Market Notices relating to the Bank’s gilt purchases under the APF will apply.
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