The Bank of England (BoE) has completed the sale of the £19.3bn portfolio of temporary holdings of UK government bonds previously purchased on financial stability grounds in autumn 2022.

The BoE confirmed yesterday that it had fully sold its £19.3bn portfolio of temporary gilt holdings, following a reverse enquiry window, and the subsequent bilateral sale of small remaining holdings.

Plans for the temporary and targeted purchases of index-linked and long-dated conventional UK government bonds were initially announced by BoE in September, in an effort to prevent a “self-reinforcing spiral”, after gilt yields surged following the Chancellor’s mini-Budget.

As part of this intervention, BoE purchased a total of £19.3bn of gilts, of which £12.1bn were long-dated conventional gilts and £7.2bn were index-linked gilts.

However, to ensure the BofE delivered on its commitment that the purchases would be temporary in nature, it began unwinding these purchases on 29 November, with gilts in this portfolio made available to interested buyers via reverse enquiry windows.

This approach, according to BoE, helped ensure that the unwind was responsive to market demand and did not trigger renewed dysfunction, with the Financial Policy Committee having welcomed the Bank’s “timely but orderly unwind of this portfolio”.

The BoE confirmed that the Monetary Policy Committee (MPC) has also been informed, in line with the Concordat governing MPC’s engagement with the Bank Executive regarding balance sheet operations.


This article first appeared on our sister title, Pensions Age.

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