MADRID, 18 Oct. (EUROPA PRESS) –
The Bank of England is considering postponing the sale of billions of pounds in sovereign bonds of the United Kingdom (‘gilts’) acquired in the hope of greater stability in the debt markets after the turbulence unleashed by the failed ‘mini-budget’ presented in September by the government of Liz Truss, which has finally backed down on almost all the announced tax cuts, according to the ‘Financial Times’ newspaper.
The British issuing institute had already delayed the start of the sale of 838,000 million pounds sterling (968,686 million euros) acquired through the quantitative easing program from October 6 until the end of this month and now it is expected that, given the Investor pressure, take an additional pause until the market calms down.
In fact, as a result of the turbulence in the debt markets unleashed by the announcement by the Government at the end of September of the package of tax cuts and increased public spending, known as the ‘mini-budget’, the Bank of England was forced to stop reducing your balance and launch new purchase auctions.
As ‘Financial Times’ has learned, senior officials from the UK central bank would have reached this conclusion considering that the ‘gilts’ market was “very distressed” in recent weeks, an opinion supported by the Policy Committee Financial, after investors have warned that the central bank’s plans to start selling the bonds in its portfolio at the end of the month could destabilize the markets.
Thus, even though 30-year gilt yields have dipped from the recent peak of over 5% to 4.32% this Monday, they still remain well above the 3.75% reached earlier. of the announcement of the ‘mini-budget’.
According to the initial plans of the Bank of England, the entity contemplated getting rid of some 80,000 million pounds sterling (96,000 million euros) in the first year of liquidation of its balance sheet, a rate that would imply at least a decade to complete the quantitative adjustment ( QT) of the entity, in opposition to the quantitative easing (QE) policy implemented in recent years.
