BOE Unwind Puts £368 Billion in Long-Term Test for Global Markets

The Bank of England (BOE) has announced plans to unwind £368 billion worth of gilts by September 2034, a move that could impact global yields and risk appetite. The BOE will sell an average of £46 billion in gilts per year through bond maturities and active sales, with the goal of reducing its stock.

The planned sales pace is relatively similar to recent practice, with the Bank selling £21 billion over the past 12 months compared to the new plan's £20 billion annual target. However, this move could still have a significant impact on global markets, particularly for Bitcoin.

The BOE estimates that quantitative tightening (QT) has added 20-30 basis points to long-term gilt term premia since 2022, and its decision creates a long-run test: whether predictable central-bank withdrawal can add enough pressure to global yields and risk appetite to reach Bitcoin. Initial market response indicates a mild impact, with the 10-year gilt yield falling by more than 7 basis points and the 30-year yield decreasing by nearly 10 basis points.