Bank of England to reduce bond sales

The Bank of England has announced a significant reduction in its bond sales as part of its quantitative tightening strategy. The Monetary Policy Committee (MPC) has decided to cut active gilt sales to £13 billion, a substantial decrease from the £80 billion sold last year. This move is intended to alleviate financial pressure on the government, particularly in light of the upcoming budget next month. The central bank plans to implement £100 billion of quantitative tightening over the next year, maintaining the same pace as the previous year. This figure aligns with market expectations but is lower than the £125 billion forecasted by some economists. The remaining £87 billion will be generated through maturing gilts, with the proceeds not being reinvested. This decision marks a pivotal moment for the Bank of England, as it continues to navigate the complexities of monetary policy in a challenging economic environment. The reduction in bond sales is expected to have implications for public finances and the broader economy, as the government prepares for its budgetary decisions. Overall, the Bank's actions reflect a cautious approach to managing its balance sheet while addressing the needs of the government. The MPC's decision underscores the ongoing challenges faced by policymakers in balancing inflation control with economic growth.