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UK gilt yields rise as BoE pooh-poohs report of delay to bond sales
Published by Jessica Weisman-Pitts
Posted on October 18, 2022
2 min readLast updated: February 3, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on October 18, 2022
2 min readLast updated: February 3, 2026
LONDON (Reuters) – British government bond yields rose after the Bank of England said it had not decided to delay the start of its “quantitative tightening” sales of gilts again, labelling a Financial Times report that said such a move was likely as inaccurate.
LONDON (Reuters) – British government bond yields rose after the Bank of England said it had not decided to delay the start of its “quantitative tightening” sales of gilts again, labelling a Financial Times report that said such a move was likely as inaccurate.
The 10-year gilt yield shot up by as much as 9 basis points (bps) after the BoE’s statement on Tuesday as investors took it as a sign that the central bank will press ahead with its bond sales.
The FT said the BoE would probably push back the start of its gilt sales from its latest scheduled date of Oct. 31, having already delayed it from an original date of Oct. 6. The newspaper said it had learned that top officials at the BoE had come to the view that a delay was needed.
“This morning’s FT report that the BoE has decided to delay MPC gilt sales (‘QT’) is inaccurate,” a spokesperson for the central bank said.
At 12:26 pm (1126 GMT), the 10-year yield was up 7 bps on the day at 4.045%. Twenty- and 30-year gilt yields were up by less, around 4 bps on the day.
The two-year yield, which is most sensitive to short-term moves by the central bank, showed the biggest rise, up 13 bps on the day.
Earlier on Tuesday, Britain’s Debt Management Office attracted bids worth 2.13 times the 2.5 billion pounds offered at a sale of 1.25% gilts due in 2051.
There was, however, a relatively wide 1.50-bps gap between the yield for the average price and the lowest accepted price, indicating the DMO accepted some lowball bids.
British government bond yields soared in recent weeks after the government of new Prime Minister Liz Truss announced a string of unfunded tax cuts. Yields reversed some of the increases on Monday when new finance minister Jeremy Hunt scrapped most of the stimulus plans.
(Reporting by Andy Bruce; Editing by William Schomberg)
Bond yields represent the return an investor can expect to earn from a bond. They are inversely related to bond prices; as prices fall, yields rise, and vice versa.
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, managing monetary policy, and ensuring financial stability.
A basis point is a unit of measure used in finance to describe the percentage change in the value of financial instruments. One basis point equals one-hundredth of a percentage point.
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