Quantitative easing and the Asset Purchase Facility

We purchase financial assets such as gilts and corporate bonds in order to boost economic activity and return inflation to target.

Overview

Our asset purchases are carried out through the Asset Purchase Facility, and financed by creating central bank reserves. Transactions are undertaken by a subsidiary of the Bank – the Bank of England Asset Purchase Facility Fund Limited (BEAPFF).  

PDFAsset Purchase Facility Terms and Conditions

PDFAsset Purchase Facility Operating Procedure

Latest APF Operational Announcements

Cash transfers between BEAPFF and Her Majesty’s Treasury (HMT)

BEAPFF receives interest on the gilts and corporate bonds it holds, which were purchased using a loan from the Bank. Interest income is used to pay administrative costs, and interest on the loan. The net balance is transferred between BEAPFF and HMT every quarter.  More detail about this process can be found here.

Gilt purchases

We purchase short, medium and long-maturity gilts (UK government bonds) in the secondary market, in a process known as quantitative easing.

More detailed data on gilt purchases is available in our Market Notices and time series of operational results:

Market Notice: Asset Purchase Facility gilt purchases

Consolidated Market Notice: Asset Purchase Facility gilt purchase

ExcelGilt purchase operational results

We also have data available on the nominal value of each of the gilts purchased. These are reported on a trade date basis, and updated following any gilt purchase operation:

ExcelGilt purchases in nominal terms

We have agreed that we will make a small proportion of the gilts purchased available to the UK Debt Management Office (DMO) for on-lending to the market through the DMO’s normal repo market activity. We issued a joint statement on this in 2009.

Apply to participate in gilt purchases

To take part in the competitive auctions, you must be:

To take part in the non-competitive element of the auction, you must be appropriately authorised under the Financial Services and Markets Act, or signed up to our gilt-purchase open market operations.

Only one firm within a group can take part in the auctions, unless you undertake different kinds of activity, for example banking and asset management.

To apply, complete the application form and email to applications@bankofengland.co.uk.

Corporate bond purchases

We purchase corporate bonds to stimulate the economy by lowering the yields on corporate bonds. This has the following aims:

  • reducing the cost of borrowing for companies
  • encouraging asset sellers to rebalance their portfolios to include riskier assets
  • encouraging companies to issue more bonds.

The Bank acts as an agent for the Bank of England Asset Purchase Facility Fund (BEAPFF), and only purchases sterling corporate bonds issued by firms that make a material contribution to the UK economy. It participates in the secondary market by holding reverse auctions. However, we reserve the right to carry out purchases via other methods – such as bilateral purchases – if necessary.

Issuer and security eligibility for corporate bond purchases

We have published an updated list of the sterling corporate bonds that we will offer to purchase on behalf of the BEAPFF.

If you have any enquiries about eligible bonds, email eligible.securities@bankofengland.co.uk. Requests to consider additional corporate bonds which are not on the list should include the International Securities Identification Number (ISIN), prospectus or offering circular, pricing supplement or final terms and, if relevant, the guarantee.

Counterparties in the Corporate Bond Purchase Scheme must submit to us an indication of the bonds they would like to sell or take a position in (dealer axes). We have a template for providing this information. You should send your submission to APF_CorporateBond_DealersInfo@bankofengland.co.uk, preferably by close of business on a daily basis, but at least by close of business on the first working day of the week.

Corporate bond sector shares

The Corporate Bond Purchase Scheme started on 27 September 2016. On 27 April 2017, we announced that we had completed the operations necessary to achieve the current target for corporate bond purchases of £10 billion.

To make sure purchases are representative of issuance, we allocated each bond that was eligible for purchase to one of nine sectors, using a common sector classification. We then made purchases so that our holdings are representative of each sector’s share within the list of eligible bonds.

PDFPrevious Corporate Bond Purchase Scheme sector share and holdings results

The most recent Corporate Bond Purchase Scheme reinvestments ran 11 September – 10 October 2019. Details on the reinvestment approach, eligibility and operating parameters can be found in the 1 August market notice. The table below shows the updated share for each of the Corporate Bond Purchase Scheme’s nine sectors and our holdings in each of these sectors following the completion of the Corporate Bond Purchase Scheme reinvestment programme.

Sector CBPS Holdings as at close of business
16 October 2019
CBPS Target Sector Share
(% portfolio) (% of eligible list)
Communications 11%  11% 
Consumer, Cyclical  12%  12% 
Consumer, Non-cyclical  16%  16% 
Electricity 19% 18%
Energy 3% 3%
Gas 8% 7%
Industrial & Transport 13% 12%
Property & Finance 5% 8%
Water 12% 12%
Total 99% 99%

The operational details of how we carry out corporate bond purchases are contained in the current Corporate Bond Purchase Scheme market notices.

Corporate Bond Purchase Scheme market notices

PDFAPF Corporate Bond reinvestment operation schedule

Apply to take part in the Corporate Bond Purchase Scheme

To take part in the Corporate Bond Purchase Scheme, we must be satisfied that you are a market maker in investment-grade sterling denominated corporate bonds. You must also be a participant in the Sterling Monetary Framework for open market operations.

To apply, complete the expression of interest form and email it to applications@bankofengland.co.uk. You also need to complete the operation contacts and settlement information form and send it to BPIMarketSettlement@bankofengland.co.uk.

If your application is successful, you will have to sign an Admission Letter agreeing to the terms and conditions.

How are gilt and corporate bond purchases carried out?

Our electronic tendering system, Btender, is used to carry out all gilt and corporate bond auctions.  All counterparties must use Btender. You will also require access to SWIFTnet.

PDFUser guide for Btender

PDFBtender quick reference guide

Term Funding Scheme

Information on the Term Funding Scheme (TFS) has now been relocated to the Funding Schemes and Lending in other currencies webpage.

This page was last updated 07 November 2019
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