Sept. 28, 2022, 11:06 a.m. EDT

Bank of England sets out which bonds it will be buying after extraordinary U-turn

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By Steve Goldstein

The Bank of England on Wednesday announced its new schedule for buying bonds, just a week after reversing last week’s decision to sell them.

The central bank earlier had pledged it would buy long-dated securities at “whatever scale is necessary” to calm financial markets.

See also: Gilt yields plunge after Bank of England steps in to buy at ‘whatever scale is necessary’

The central bank then spelled out what that meant — purchases of gilts with a maturity of at least 20 years. Initially, it will buy them in increments of up to £5 billion.

The 20-year gilt yield /zigman2/quotes/211347180/realtime BX:TMBMKGB-20Y -1.40% fell 80 basis points, the 30-year gilt /zigman2/quotes/211347182/realtime BX:TMBMKGB-30Y -1.36% yield dropped 103 basis points and the 50-year gilt yield /zigman2/quotes/211347183/realtime BX:TMBMKGB-50Y -1.98% also dropped 103 basis points.

Even the maturities the Bank of England isn’t buying saw yields drop, with the 2-year /zigman2/quotes/211347169/realtime BX:TMBMKGB-02Y -0.64% falling 34 basis points and the 10-year /zigman2/quotes/211347177/realtime BX:TMBMKGB-10Y -1.59% falling 46 basis points.

It didn’t waste time, with the first auction already conducted on Wednesday afternoon. Results weren’t immediately known.

The Bank of England, while postponing the sale of gilts, said it’s still targeting an annual £80 billion reduction in the size of its balance sheet.

/zigman2/quotes/211347180/realtime
add Add to watchlist BX:TMBMKGB-20Y
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/zigman2/quotes/211347182/realtime
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/zigman2/quotes/211347183/realtime
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Dec. 5, 2022 5:00p
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/zigman2/quotes/211347169/realtime
add Add to watchlist BX:TMBMKGB-02Y
BX : Tullett Prebon
3.29
-0.02 -0.64%
Volume: 0.00
Dec. 5, 2022 5:00p
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/zigman2/quotes/211347177/realtime
add Add to watchlist BX:TMBMKGB-10Y
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Dec. 5, 2022 5:00p
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