PremiumThe Bank of England said it will make the £19 billion of UK government bonds it snapped up in recent emergency action available to investors from the end of this month.
The BOE said it intends to make the gilts available to interested buyers from Nov. 29. The sales “will commence not at a fixed pace, but will be designed in a demand-led way that is responsive to prevailing market conditions," it said in a statement on Thursday.
The central bank bought these gilts between Sept. 28 and Oct. 14 to avoid what it called a “fire sale" that threatened financial stability. The BOE stepped in as trading became disorderly amid a cascade of collateral calls facing pension funds, following turmoil sparked by former prime minister Liz Truss’ unfunded tax-cut plans. The bonds are long maturities or linked to inflation, since those were favored by the pension funds at the heart of the stress.
The BOE is already starting to offload debt from its main bond portfolio accumulated from years of quantitative easing, at a time when government borrowing is expected to surge.
Unlike its earlier QE program to stimulate the economy, the BOE’s recent emergency purchases fell under its financial-stability mandate. To reinforce the distinction, they are held in a separate portfolio from the main asset-purchase facility.
This story has been published from a wire agency feed without modifications to the text.