Asset Purchase Facility: Gilt Sales – Market Notice 20 October 2022

Market notice

At its September 2022 meeting, the Monetary Policy Committee (MPC) voted to begin sales of UK government bonds (gilts). On 28 September 2022, the Bank of England’s (Bank’s) Executive postponed the start of these gilt sale operations, in light of market conditions at that time.

As confirmed via the Bank’s statement dated 18 October 2022, the first of these gilt sale operations will now take place on 1 November 2022. As set out in the consolidated Market Notice published on 1 September 2022, the Bank will set a schedule for these operations on a quarterly basis. Accordingly, this Market Notice sets out the relevant details and schedule for the remainder of Q4 2022. Any shortfall relative to the previous sales plan, as a result of the earlier postponement, will be incorporated into sales in subsequent quarters.

For Q4 2022, these gilt sale operations will be distributed evenly across the short and medium maturity sectors only. These sectors are defined as: gilts with a residual maturity of between 3-7 years (short), and those with a residual maturity of between 7-20 years (medium). The maturity split of gilt sales for subsequent quarters will be considered ahead of Q1 2023.

As set out previously, the MPC’s decision at its September meeting to reduce the stock of purchased gilts is unaffected and unchanged.

The Bank’s approach to the unwind of the stock of gilts purchased in the course of its recent temporary and targeted financial stability operations will be confirmed separately in due course.

Gilt Sale Operations – Q4 2022

For Q4 2022, the Bank has made the following changes to its planned gilt sales programme in relation to the MPC’s September 2022 decision:

  1. These sales will begin on Tuesday 1 November, ending on Thursday 8 December 2022.
  2. These gilt sale operations will be distributed evenly across the short and medium maturity sectors only.
  3. The Bank will conduct eight sale operations across each of these two maturity sectors (four in each), with a planned size of £750mn per auction. The dates for the individual auctions are specified in the table below.

Other than as amended in this Market Notice, the detailed operational parameters and participation requirements set out previously in the consolidated Market Notice dated 1 September 2022 will apply to these gilt sales, including but not limited to:

  • Gilt sale auctions will normally begin at 2.15pm and finish at 2.45pm.footnote [1]
  • The Bank will not make available for sale gilts which the UK Debt Management Office (DMO) has announced it will re-open, including via a tender, during the period of two weeks (exactly 336 hours) before and after the re-opening.
  • The Bank will announce on its wire services pages each Thursday at 4pm the details of gilt sale operations to be held during the following week, including the stocks eligible for sale. The details of each gilt sale auction will be re-confirmed by the Bank on its wire services pages at 9am on the morning of each auction.

The Bank will closely monitor the impact of this gilt sales programme on market conditions, and reserves the right to amend its schedule, including the gilts to be sold and the size of its auctions, or any other aspects of its approach at its sole discretion.

The Bank expects to announce the sales schedule for Q1 2023 on 16 December 2022.

Table: Gilt sale auction calendar – November to December 2022

Auction date

Maturity sector

Tuesday 1 November

Short

Monday 7 November

Medium

Monday 14 November

Short

Thursday 17 November

Medium

Monday 21 November

Short

Monday 28 November

Medium

Monday 5 December

Short

Thursday 8 December

Medium

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