Asset Purchase Facility: Gilt Sales – Market Notice 15 December 2023

The Bank of England (BoE) has published a new market notice to announce its plan to sell a total of £8.15 billion worth of gilts during the first quarter (Q1) of the year. Unlike in previous quarters, the sales will no longer be evenly divided across gilts within the short-term (3-7 years remaining maturity), medium-term (8-20 years remaining maturity, and long-term (beyond 20 years remaining maturity) maturity buckets. As noted in the table below, the BoE plans to conduct four auctions in the short-term and medium-term bucket of £800 million and £750 million each, respectively, and three actions for securities with long-term remaining maturities of £650 million each. The auctions will begin on January 8, 2024.
The Bank’s decision to sell gilts is in line with its commitment established during the September 2023 Monetary Policy Committee (MPC) meeting to reduce the amount of purchased gilts held in the Asset Purchase Facility (APF) by £100 billion over the course of the next twelve months.
To conclude, the BoE emphasizes that it reserves the right to make changes to its schedule, including the gilts to be sold, auction sizes, or any other aspect, if so needed. The next guilt schedule will be announced on March 22, 2024.
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Table 1 – Auction Schedule