By Nick McLaren and Tom Smith of the Bank’s Macro Financial Analysis Division.
In November 2012, a process for regular cash transfers between the Bank of England’s Asset Purchase Facility Fund Limited (APF) and Her Majesty’s Treasury (HMT) was established. The size and timing of these transfers depends on a number of uncertain factors, including the future path of Bank Rate, and the price at which the assets held by the APF are ultimately sold. This article uses a spreadsheet-based framework, which has also been made available on the Bank’s website, to show how the size and timing of the transfers varies depending on the assumptions made about these uncertain factors. While the initial transfers are from the APF to HMT, it is likely they will be offset by payments in the opposite direction in the future. The ultimate net amount that will be transferred is uncertain, and a wide range of outcomes is possible.
This updated version of the spreadsheet incorporates the Asset Purchase Facility gilt portfolio and market yield curves as of 31 August 2016 (the original spreadsheet included data as of 28 February 2013). It takes no account of Asset Purchase Facility operations which have been announced but had not been carried out by 31 August 2016. The original version should be used to replicate the results presented in the Quarterly Bulletin article.
This updated version of the spreadsheet incorporates the Asset Purchase Facility gilt and corporate bond portfolio and market yield curves as of 29 September 2017. It takes no account of Asset Purchase Facility operations carried out after 29 September 2017.
Following the 2016 amendments to the APF, the interactive calculator became out of date. This spreadsheet shows a small number of illustrative scenarios for future cash transfers using an internal Bank tool and further scenarios can be requested as described in the spreadsheet. The scenarios contained in the spreadsheet do not represent the views of the Bank of England or the Bank's Monetary Policy Committee on the future path of Bank Rate, the APF's portfolio or other parameters used.
The spreadsheet is designed to show how the broad profile of the cash transfers is affected by a small number of key variables over the medium term, under some simplifying assumptions. It should not be used to form precise forecasts of the size of individual cash transfers. This spreadsheet has been updated from time to time. The Bank has now ceased publication of these updates.