On 28 September 2022, the Bank of England’s (Bank’s) Executive postponed the start of sales of UK government bonds (gilts) held in the Asset Purchase Facility (APF) in light of market conditions at that time. The first gilt sales operation was scheduled to take place on 31 October 2022 and proceed thereafter.
In light of the Government’s fiscal announcement now scheduled for 31 October 2022, the first gilt sale operation will now take place on 1 November 2022.
The Bank currently expects to conduct APF gilt sales operations in Q4 2022 at a similar size and frequency as had been previously announced, with any shortfall as a result of the earlier postponement relative to its previous sales plan incorporated into sales in subsequent quarters.
For Q4 2022, these APF gilt sales operations will be distributed evenly across the short and medium maturity sectors only. These sectors are defined as: gilts with a residual maturity of between 3-7 years (short), and those with a residual maturity of between 7-20 years (medium). The maturity split of gilt sales for subsequent quarters will be considered ahead of Q1 2023.
The dates and sizes for the individual auctions will be confirmed in a Market Notice, which the Bank expects to publish at 6pm on 20 October 2022.
The Bank will continue to monitor market conditions closely, and where appropriate factor that into the design of its sales operations.
The Monetary Policy Committee (MPC) has been informed of these operational changes. As set out previously, the MPC’s decision at its September meeting to reduce the stock of purchased gilts is unaffected and unchanged.