Overview

• Active gilt sales have crystallized billions in losses, prompting HM Treasury to transfer nearly £90 billion to cover interest payments and bond sale losses.
• Deutsche Bank calculates that focusing QT on short and medium-term maturities could reduce the projected Treasury bill by around £5 billion to roughly £18.9 billion.
• Market participants predict a slowdown in annual gilt sales from £100 billion to £75 billion, which could trim the Treasury’s cost to about £15.6 billion and boost potential savings to £8.4 billion.
• Reform Party leaders are pressing for an immediate halt to active gilt sales, arguing that QT-induced supply has driven up yields.
• Governor Andrew Bailey has indicated that global bond curve steepening will inform the Bank’s September decision on the pace and structure of gilt sales.