Bank of England Announces Shift in Bond Auction Strategy

In response to recent market volatility, the Bank of England (BoE) has decided to adjust its bond auction strategy. Instead of long maturity bonds, the BoE will now auction short maturity bonds on April 14. This decision was announced in a statement released on Thursday.

Rescheduling for a Balanced Approach

The BoE detailed its plan to reschedule the long maturity bond auction to the following quarter. This move aims to ensure the reduction of the Asset Purchase Facility (APF) is as evenly distributed as possible across different maturity sectors, measured in initial proceeds terms. The bank reassured that the schedule for the second quarter remains unchanged aside from this adjustment.

Monitoring Market Conditions

As previously mentioned in the BoE's Market Notice on March 21, 2025, the bank will continue to closely monitor the effects of its gilt sales program on market conditions. The BoE is prepared to make further amendments to its schedule if deemed necessary, highlighting its commitment to maintaining market stability.