BOE May Hold Off on U.K. Bond Sales Given Poor Market Liquidity
- ING cites wide bid-ask spreads, volatility as headwinds
- Investors might get more operational details next month
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Poor market conditions are giving the Bank of England a reason to refrain from actively reducing its 847 billion pound ($1.1 trillion) gilt portfolio as soon as next month.
Money markets are more than fully pricing the BOE raising its key rate next week to 1%, the threshold at which officials say they will consider selling bonds into the market. The U.K. central bank has already started passively reducing its balance sheet by not reinvesting maturing gilts in its portfolio.