BOE May End Active Corporate Bond Sales Program as Soon as Today

The Bank of England could complete active sales of corporate bonds bought as part of its quantitative easing program as early as Tuesday.

(Bloomberg) — The Bank of England could complete active sales of corporate bonds bought as part of its quantitative easing program as early as Tuesday.

The central bank is due to auction off a little over £100 million of corporate bonds later today, taking the outstanding nominal amount to just under £1 billion. The remaining bonds are all short-dated and will mature by April next year, at which point the central bank will no longer hold any corporate debt in its asset purchase facility.

The corporate program was used to stabilize markets in the wake of the Brexit vote and doubled in size during the pandemic to provide support to business as large parts of the economy were shut down. It formed part of a wider quantitative easing effort that’s expected to cost the UK taxpayer at least £100 billion, threatening to become a massive drain on the government’s resources.

It subsequently ran into controversy as the central banks bought blue-chip bonds from fossil fuel companies that contravened its own carbon emission guidelines.

The BOE still holds about £811 billion of gilts, around £80 billion of which are being run off or sold each year.

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