Traders Call on Bank of England to End Bond Buying Early
- Sudden cut to U.K.’s bond supply has spurred market turbulence
- Policy makers to decide on rates, bond buying at Thursday meet
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A dramatic cut to the U.K.’s bond supply in coming months is raising the possibility of the Bank of England resorting to a counter-intuitive move: ending quantitative easing to stabilize the market.
The central bank has been buying gilts for over 12 years since the financial crisis to keep yields low and trading orderly. Yet a larger-than-expected cut in bond sales announced last week sparked turbulence, sending long-term rates plunging and upending market dynamics with rare inversions of parts of the yield curve.