The Bank of England will start selling the government bonds it purchased in the aftermath of the UK market chaos caused by the Mini Budget from today (29 November).
Unlike prior gilt sale operations where there is a fixed amount to be raised, the BoE will sell long-maturity and index-linked gilts based on market demand to avoid hurting markets. The temporary purchases of long-dated UK government bonds began from 28 September "to restore orderly market conditions" after Liz Truss' package of unfunded tax cuts sparked a gilts sell-off. The bonds were bought as part of the Bank's financial stability mandate to reduce the danger of "fire-sale" dynamics, in which pension funds rushed to meet margin calls. Given that markets are already dealing w...
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