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Bank of England pauses gilt sales, shifts funding plans

By Drooid · Sep 17, 2026, 10:53 PM UTC · How we work

Summary

Bank of England pauses

The Bank of England announced a pause on gilt sales and a halt to long-dated bonds.
Governor Andrew Bailey said the Bank will sell £146 billion of gilts to the Treasury at £20 billion per year until 2034.
Treasury’s Debt Management Office will issue new bonds to fund the buy-back, replacing market auctions.
30-year gilt yields fell to 5.745%, the biggest drop since 2020, after the announcement.

Summary

UBS predicts hikes

The Monetary Policy Committee kept the policy rate at 3.75% after a 6-3 vote on 17 September 2026.
UBS forecasts two BoE hikes within 12 months before a prolonged hold.
UBS attributes the steep front-end curve to higher risk premia from inflation uncertainty, not policy moves.
Swap data show a roughly 90% chance of a 0.25-point rate rise at the November meeting.

History

Historical Context

In 2009, the Bank of England launched a £75 billion quantitative-easing program, purchasing government gilts to stabilize markets after the financial crisis. The programme, overseen by Governor Mervyn King, reduced 10-year gilt yields from 5.5% to 3.9% within twelve months, injecting liquidity. Today, the BoE under Governor Andrew Bailey mirrors that approach by pausing gilt sales and planning a £146 billion buy-back through the Treasury’s Debt Management Office. The precedent suggests that coordinated buy-backs, like those forecast by UBS, can compress front-end curves and shape policy-rate decisions for years ahead.

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Bank of England pauses

The Bank of England announced a pause on gilt sales and a halt to long-dated bonds.
Governor Andrew Bailey said the Bank will sell £146 billion of gilts to the Treasury at £20 billion per year until 2034.
Treasury’s Debt Management Office will issue new bonds to fund the buy-back, replacing market auctions.
30-year gilt yields fell to 5.745%, the biggest drop since 2020, after the announcement.

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