The Bank of England is shaking up its bond sales - why does it matter?

AI desk brief

The Bank of England’s proposed QT reset is a meaningful rates story: it would stop the BoE from selling long-dated gilts into the market and instead let the Treasury’s DMO absorb and reissue the bonds, reducing future long-end supply. The article says 30-year gilt yields dropped to 5.745% on the announcement, with the move on course for its biggest fall since 2020, while Jefferies said the changes imply a materially lower future supply burden, especially for long-dated gilts.

For metals, the near-term takeaway is supportive via lower sovereign term premium and the prospect of less pressure on bond markets. The BoE has already run down its gilt stock by £70bn this year and plans to sell £20bn annually over coming years, but QT is now paused until a final decision in April.