Jessica Fleetham
The Bank of England said it has now completed sales of the gilts it purchased under an emergency bond-buying program after disruption caused by the government's mini-Budget, unveiled on September 23 under previous Prime Minister Liz Truss.
Gilt yields surged and sterling tumbled in the wake of the budget announcement, which pledged large tax cuts and caps on energy bills to be funded by additional borrowing. The measures, which resulted in Truss's departure as prime minister, were later reversed.
Under the emergency program, the BOE purchased 19.3 billion pounds($23.45 billion) in gilts between September 28 and October 14, of which GBP12.1 billion were long-dated conventional gilts and GBP7.2 billion were index-linked gilts.
The completion "follows yesterday's reverse enquiry window, and the subsequent bilateral sale of small remaining holdings," the BOE said in a press release.
"The purchases were made to restore orderly market conditions following dysfunction in the U.K. gilt market, and in doing so reduce risks from contagion to credit conditions for U.K. households and businesses."
The BOE began unwinding the exceptional purchases on November 29.
The Financial Policy Committee has welcomed the "timely but orderly unwind of this portfolio," while the Monetary Policy Committee has been informed, the BOE said.
Write to Jessica Fleetham at jessica.fleetham@wsj.com
(END) Dow Jones Newswires
01-12-23 1128ET
