BoE Halts Long-Dated Gilt Sales Amid Market Turmoil

The Bank of England has put its long-dated gilt sales on hold for six months and stopped selling them entirely, as it announces a new plan to unwind £488 billion in gilts by 2034. The central bank's decision comes days after British 30-year borrowing costs hit their highest since 1998.

The BoE says the move is not a response to deteriorating market conditions, but rather a change in its bond sale policy that was underway before the US-Iran war in February. Governor Andrew Bailey said the central bank aims to reduce its gilt holdings to a minimum and views changing the pace of sales as affecting only the timing of losses to the government.

The BoE will pause all gilt auctions until April while it consults with the government on selling gilts directly to the finance ministry's Debt Management Office at market prices. This shift could help avoid getting bad prices at auctions for small residual amounts of gilt.