Bank of England Considers Halt to Long-Term Gilt Sales Amid High Borrowing Costs

The Bank of England is considering halting sales of long-term government bonds due to high borrowing costs and pressure on Chancellor John Healey's fiscal rule. The plan, which involves suspending sales of 20- and 30-year gilts, could save taxpayers an estimated £2.5 billion a year by the end of the decade.

The Bank has been selling long-term bonds through quantitative tightening at an average discount of around 50%, generating significant losses for taxpayers. Economists estimate that unwinding the bond portfolio will cost roughly £100 billion over the next five years.

The move comes as a global bond sell-off puts pressure on Healey ahead of his first Budget on October 28. Britain paid its highest borrowing rate in over 25 years last week, and borrowing costs have reached 5% for the first time since 2023.