UK gilts has taken a tumble today. The exclusion of two bonds from the Bank of England’s buyback scheme is being taken as a sign that the central bank is starting to wind down its asset purchase programme.
The BOE said it will exclude two gilts, the 5% 2014 and the 8% 2021 from it’s weekly purchase operations until further notice, and will keep under review the other bonds eligible for the scheme.
Policymakers have said they are on track to complete the £125 bln of asset purchases by the end of July and the buyback list announcement made yesterday has triggered concerns the quantitative easing programme will not be extended any further after then.
This development will be helping underpin sterling at the present time.
