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BoE call sparks gilts sell off

Gilts yields skyrocketed yesterday after the Bank of England announced it was considering putting its quantitative easing plan on hold.

Speaking to Bloomberg 20 minutes after a £5bn bond deal was finalised, an external member of the Bank’s interest rate setting monetary policy committee Andrew Sentence said the next meeting would focus on “whether we are now going to move into a phase where we’re watching and observing what is happening in the economy.”

His comments raised expectations of a pause in the cash injections into the market, which is already in excess of £100bn, through the purchase of government bonds.

The announcement saw benchmark 10-year gilt yields jump from 0.12 to 3.96 per cent.

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