The Bank of England voted unanimously to redesign its quantitative tightening program, laying out a decade-long schedule through 2034. The central bank plans to unwind £488 billion in gilt holdings by the end of 2034 at an average pace of £46 billion per year, down from the prior annual target of £70 billion. The framework splits the remaining portfolio into three buckets: £222 billion in gilts maturing by 2035 will roll off passively, £146 billion will be actively sold at £20 billion per year, and £120 billion in longest-dated gilts maturing beyond 2049 will be permanently retained to back banknote issuance. The Bank Rate remains unchanged at 3.75 percent, with all gilt auctions paused for six months pending a review before April 2027. UK government bonds rallied, long-term yields dropped, and the pound softened slightly following the announcement.
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