Bond investors are paying closer attention to the Bank of England's plans for its quantitative-tightening program than to its interest-rate decision at Thursday's policy meeting. Markets widely expect rates to remain on hold, but the real focus is on whether the BOE will scale back or even halt active bond sales from its balance sheet. The QT program involves unwinding the gilt purchases made under its pandemic-era quantitative easing.

Analysts are divided on the likely QT outcome. Any reduction in active gilt sales could serve as a tailwind for the bond market. The September 17, 2026 meeting highlights how balance-sheet policy may now matter more than rate changes for UK bond yields.

The bond market's fixation on QT reflects a shift in how monetary policy transmission works as the UK economy navigates post-pandemic fiscal adjustments. Investors are watching for signals on the pace of balance-sheet reduction.