Asset Purchase Facility: Gilt Purchases - Market Notice 7 February 2019

As set out in the Minutes of the MPC’s meeting ending on 6 February 2019, the MPC has agreed to make £20.6 billion of gilt purchases, financed by central bank reserves, to reinvest the cash flows associated with the maturity on 7 March 2019 of a gilt owned by the Asset Purchase Facility (APF).
Published on 07 February 2019

Operations to make these gilt purchases will commence in the week beginning 11 March 2019. The range of gilts eligible for purchase will remain unchanged from previous operations. The Bank will continue, normally, to conduct three auctions a week: gilts with a residual maturity of 3-7 years will be purchased on Mondays; of over 15 years on Tuesdays; and of 7-15 years on Wednesdays.

The Bank does not intend to hold a gilt purchase operation on 13 March 2019, the day of HMT’s Spring Statement this year. This operation will instead be held on Wednesday 24 April 2019.

The Bank intends to purchase evenly across the three gilt maturity sectors. The size of auctions will initially be £1,146mn 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. 

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.