Bank Rewrites QT: Long-Gilt Sales Ended, and the Bond Market Roars
The quiet revolution came alongside the hold: a unanimous decision to pause all gilt sales until April 2027 and end sales of long-dated gilts entirely — roughly £120bn of the longest bonds now effectively held for good, with the remaining £488bn unwound gently to 2034. Thirty-year yields plunged from near 6% to 5.73%, the biggest one-day fall since spring; the FTSE jumped 1.2% to 10,816. The Chancellor welcomed “value for money” for taxpayers; sterling slid to $1.3346.
This is fiscal rescue conducted through the balance sheet: with long yields at generational highs and a Budget six weeks away, the Bank has removed the single largest structural seller from the gilt market — itself — and the market’s violent gratitude shows how much of the yield premium was QT-flow rather than fundamentals. The independence optics are delicate by design: a unanimous technical decision, justified as “market efficiency”, that happens to hand the Chancellor billions in avoided losses and cheaper borrowing weeks before he needs both. Sterling’s slide is the tell that markets read easing by another name. The rally’s durability is the question — Friday will test whether it was repricing or relief. Watch the 30-year yield’s new range: it prices the Budget’s room directly.