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The Bank of England's planned bond selling programme may be delayed once again as Threadneedle Street strives to restore more order to gilt markets, the Financial Times reported on Tuesday.
The start of the bond sales, part of the central bank's quantitative tightening programme, may be delayed beyond the end of this month. The BoE had already shifted the start of a sale of £838 billion worth of gilts to the end of October from October 6.
That was in response to market turmoil following the UK government's mini-budget.
The FT reported on Tuesday that top officials at the central bank view the gilt market as "very distressed".
https://www.ft.com/content/92a0de1a-a710-4460-8bb1-a98cb9932995
The Bank of England temporarily stepped into the bond market to buy gilts, which are UK government bonds, in response to the mini-budget late last month. This had spooked financial markets and eventually led to the departure of Kwasi Kwarteng as chancellor last week.
The appointment of Jeremy Hunt, who then reversed most of the policies, has stabilised markets somewhat. Yields remain wider than they were ahead of the mini-budget, however.
The yield on the 30-year gilt ended at 4.37% late Tuesday, compared to 3.78% prior to the mini-budget. The yield on the long-dated bond narrowed further to 4.30% shortly after markets opened on Tuesday.
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