BoE Holds Rates, Slows QT as Energy Prices Push for September Hike

The Bank of England is expected to keep its main interest rate at 3.75% on Thursday, but may slow down its quantitative tightening (QT) program.

Economists surveyed by Reuters expect another hold, and Governor Andrew Bailey has said there's no preset plan to hike unless the oil-driven rise in prices spills into broader inflation or wages.

The BoE is also expected to trim its annual gilt runoff target to £50 billion from £70 billion as it unwinds the bond-buying built up between 2009 and 2021.

The slowdown in QT partly reflects fewer bonds maturing this year, but also reduces how many long-term bonds private investors have to absorb, which can ease pressure on 20- and 30-year yields even if the policy rate stays put.