Asset Purchase Facility: Gilt Purchases - Market Notice 21 June 2018

As set out in the MPC’s statement of 21 June 2018, the MPC has agreed to make £2.9bn of gilt purchases, financed by central bank reserves, to reinvest the cash flows associated with the maturity on 22 July 2018 of a gilt owned by the Asset Purchase Facility (APF).
Published on 21 June 2018

Operations to make these gilt purchases will be held in the week beginning 23 July 2018.  The range of gilts eligible for purchase will remain unchanged from previous operations.  The Bank plans to conduct three auctions in that week: gilts with a residual maturity of 3-7 years will be purchased on Monday 23 July; of over 15 years on Tuesday 24 July; and of 7-15 years on Wednesday 25 July. 

The Bank intends to purchase evenly across the three gilt maturity sectors.  The planned size of auctions will be £955mn for each maturity sector.

The Bank will confirm details of the operations on Thursday 19 July 2018 at 16.00 (London time).  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. 

As the DMO has ceased to publish intraday gilt yields, offers into APF gilt purchase operations will now be allocated based on their attractiveness relative to market mid yields, as published by Tradeweb, at the close of the auction. 

Other than as amended by this Market Notice, previous Market Notices relating to the Bank’s gilt purchases under the APF will apply.1

1 View the current consolidated Market Notice