The Bank of England announced a major overhaul of its quantitative tightening (QT) programme, deciding to retain £120bn of the longest‑dated gilts on its balance sheet permanently to back current and future banknote issuance. The remaining holdings will be wound down over eight years through a mix of maturing bonds and active sales, with £20bn a year sold back to the Treasury via off‑market transactions with the Debt Management Office (DMO). FT Alphaville noted the move mirrors its recent recommendations, including shifting unloved bonds from the Asset Purchase Facility to the Issue Department as a tidy accounting solution.

The BoE estimates QT has pushed gilt yields 20‑30 basis points higher; 30‑year yields fell around 12bps on the news before closing 8bps lower. The decision aligns the DMO’s comfort with reprofiling debt maturity and the Bank’s shift from buyer to active seller.