LONDON (MNI) – The Bank of England saw the cover ratio at its
stg1.1 billion 3-7 year reverse gilt auction Monday fall to a low for
this stg50 billion tranche of quantitative easing of just 1.79 from
2.49 in the corresponding auction last week.
This is the last of the 3-7 year gilt auctions in the current
QE tranche, which is due to end this week, with the larger stg1.1
billion amount designed to nudge the asset buying up to the stg375
billion target by week end.
In the current tranche of stg50 billion of QE the average cover
ratio for 3-7 year auctions has been 2.5, with the high of 3.69 hit in
the first auction on July 9 and with Monday’s auction marking a new low.
With this tranche of QE due to expire this week, there will be no
auctions in the week starting November 5 ahead of the MPC’s November 7
and 8 policy meeting and there are growing doubts the committee will
sanction further QE at that meeting.
Under the BOE’s current programme gilts with a residual maturity of
3-7 years are being purchased on Mondays, over 15 years on Tuesdays and
7-15 years on Wednesdays.
-London newsroom 0044 20 7862 7491; email: drobinson@marketnews.com
[TOPICS: M$$BE$]
