Bank of England Pauses Auctions to Sell 146.5 Billion Pounds in Gilts

The Bank of England will sell 146.5 billion pounds of government bonds over the next several years. This figure represents the portion of its portfolio maturing between 2035 and 2049. The central bank announced this decision in a market notice dated September 17, 2026.

Auctions for these assets are immediately paused. The bank is reviewing a model to sell these bonds directly to the government. This move follows the Monetary Policy Committee decision to reduce its holdings to zero.

Portfolio split into three distinct categories

The bank retains 221.7 billion pounds in bonds maturing before 2035. These assets will be held until they reach maturity. An additional 120 billion pounds in long-dated bonds will also be kept.

The 120 billion pound tranche serves a specific monetary function. It indirectly backs current and future banknote issuance. This includes all bonds maturing after 2049 and part of the 2049 issue.

Direct sales to Treasury proposed

The remaining 146.5 billion pounds will be sold at market prices. The bank has engaged with HM Treasury and the Debt Management Office for this purpose. Under the proposed model, the government would purchase these assets.

Sales will occur at an annualized pace of 20 billion pounds. The process is designed to conclude around 2034. This aligns with the timeline for the remaining holdings to mature.

Operational review scheduled for early 2027

The bank will review its progress before April 2027. A final decision on the sales method will be made by then. Operational details will be announced regardless of the chosen path.

Implementation could begin in time for the annual financing remit. This allows the Debt Management Office to incorporate the changes. The existing gilt lending facility remains fully available to the market.