Finance
Bank of England's Bailey says September QT decision is 'open'
Published by Global Banking & Finance Review®
Posted on September 3, 2025
2 min readLast updated: January 22, 2026
Quick Summary
BoE Governor Bailey states the September QT decision is open. The BoE has reduced bond holdings significantly, with investor expectations indicating a slowdown.
Bank of England's Bailey Indicates September QT Decision Remains Open
Quantitative Tightening Decisions
By David Milliken and Yoruk Bahceli
Current Status of Gilt Sales
LONDON (Reuters) -Bank of England Governor Andrew Bailey said on Wednesday that the future pace of quantitative tightening remained an "open decision" for its policymakers later this month.
Impact of Long-Dated Gilt Yields
The BoE bought 875 billion pounds ($1.18 trillion) of British government bonds between 2009 and 2021 to help support the economy and since 2022 has reduced this stockpile to 558 billion pounds through a mix of outright sales and gilts maturing.
Expectations from Policymakers
The BoE sets the annual pace of QT once a year in September through a Monetary Policy Committee vote at the same time as a regular interest rate decision.
Over the past year the BoE has reduced its holdings by 100 billion pounds, but a BoE survey of investors last month showed a median expectation that the central bank will slow the pace over the next 12 months to 72 billion pounds.
However, there have been some forecasts and calls for the BoE to halt gilt sales entirely, including by one lawmaker on the House of Commons' Treasury Committee, which Bailey appeared before on Wednesday.
"Just to reassure you, the decision we're going to take in the next few weeks is an open decision, very clear, nothing closed about that decision," Bailey said.
The BoE estimates that net losses from QE and QT - which are underwritten by taxpayers - are likely to total around 115 billion pounds.
Some critics say the BoE's approach to gilt sales is increasing these costs.
Bailey said the 115 billion pound estimate did not take into account the benefit the government received from lower borrowing costs in the 2010s and early 2020s.
Long-dated gilt yields rose to their highest since 1998 on Wednesday, increasing the losses which are crystallised when the BoE sells these gilts.
Bailey repeated previous remarks that the BoE viewed the impact of QT on yields as low but would look "very seriously" at the "interaction" between higher long-dated gilt yields and its sales programme.
Such comments have made some analysts predict the BoE will skew QT away from sales of the longest-dated bonds in its portfolio.
($1 = 0.7402 pounds)
(Reporting by David Milliken and Yoruk BahceliEditing by Gareth Jones)
Key Takeaways
- •BoE's QT decision for September is still undecided.
- •BoE has reduced bond holdings significantly since 2022.
- •Investor expectations suggest a slowdown in QT pace.
- •Long-dated gilt yields are at their highest since 1998.
- •QT's impact on yields is viewed as low by the BoE.
Frequently Asked Questions about Bank of England's Bailey says September QT decision is 'open'
1What did Andrew Bailey say about the upcoming QT decision?
Andrew Bailey stated that the decision regarding the pace of quantitative tightening is an 'open decision' for policymakers later this month.
2How much has the Bank of England reduced its bond holdings?
The Bank of England has reduced its bond holdings by 100 billion pounds over the past year, bringing the total to 558 billion pounds.
3What are the estimated net losses from QE and QT?
The Bank of England estimates that net losses from quantitative easing and tightening are likely to total around 115 billion pounds.
4What impact does the BoE expect from QT on gilt yields?
Bailey mentioned that the BoE views the impact of quantitative tightening on yields as low but will closely examine the interaction between higher long-dated gilt yields and its sales program.
5What are some forecasts regarding the BoE's gilt sales?
There have been forecasts suggesting that the BoE may slow the pace of gilt sales or even halt them entirely, as indicated by some lawmakers.
