Photographer: Simon Dawson/Bloomberg

Why the BOE Overpaying for QE Bonds is Not Necessarily a Bad Thing

Updated on

Nobody likes paying over the odds for something, right? Well maybe it has its upsides when it comes to the Bank of England's government bond purchases.

The BOE paid a premium for all the long-dated gilts bought at an operation on Tuesday after it drew offers of just 1.5 times the amount sought. The bank is buying 1.17 billion pounds ($1.5 billion) of the bonds each week under its new QE program, part of a package of measures designed to combat the economic fallout of Brexit.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.