–Adds Detail To Version Transmitted 1218 GMT

LONDON (MNI) – The Bank of England’s Monetary Policy Committee in
its second wave of quantitative easing will continue to purchase gilts
across a full maturity range, with the lower beyond remaining maturities
of over 3 years.

The market announcement, accompanying the decision of the MPC to
relauch QE with stg75 billion of asset purchases, confounds speculation
from some strategists and economists that the BOE would announce it was
raising the lower bound of its purchase range or tilting purchases
towards the longer end of the curve.

The BOE said “the range of gilts eligible for purchase will remain

It will take four months to complete the purchases and the BOE said
it was splitting auctions into three maturity ranges: 3 to 10 years,
over 25 years and 10 to 25 years.

“The Bank intends to purchase evenly across the three gilt maturity
sectors,” it said.

The BOE said it would hold three auctions a week. On Mondays it
will purchase gilts with residual maturities of 3 to 10 year; it will
purchase gilts of over 25 years on Tuesdays and of 10-25 years on

The BOE is also sticking with its previous policy of not purchasing
gilts in which it holds more than 70% of the “free float” – that is of
the nominal amount outstanding excluding government holdings.

–London newsroom: 4420 7862 7491 email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,M$$BE$,MT$$$$]