THE Bank of England (BOE) yesterday indicated it wanted to sell the long-dated state bonds purchased during the market turbulence caused by the last UK government’s mini budget between November 29 and the end of the year.

“Consistent with the objectives of the purchases announced on September 28, the bank is now setting out how it intends to unwind this portfolio in a way that is timely but orderly,” the BOE said in a statement.

It added that it intended to “make gilts in the portfolio available to interested buyers from November 29”.

The bank said the sale would be done in a way that was “orderly to ensure it does not trigger renewed dysfunction”.

“With this in mind, the bank’s sales will commence not at a fixed pace, but will be designed in a demand-led way that is responsive to prevailing market conditions,” it added.

On September 23, former prime minister Liz Truss and her chancellor Kwasi Kwarteng sparked market turmoil with a debt-fuelled, tax-slashing mini-budget.

The budget spooked markets and caused UK borrowing rates to soar and the pound to plunge to an historic low. 

The BOE launched an emergency intervention to purchase the long-dated state bonds and avert a worsening financial catastrophe, while warning that this intervention would be temporary.

The resignation of Kwarteng and then of Truss then contributed to bringing down long-term borrowing rates and causing the pound to rebound. – AFP, November 11, 2022.