Gilts rally as Bank of England pauses bond sales - The Times

UK government bonds, known as gilts, rallied after the Bank of England paused its programme of active bond sales, according to The Times. The decision means the central bank is holding off on further reductions of its bond holdings for now, rather than continuing to sell down the stock accumulated through earlier quantitative easing.

For markets, the move matters because gilt sales are one way the Bank withdraws liquidity from the financial system. Pausing them removes a source of supply pressure on UK government debt, which can support prices and push yields lower. Yields move inversely to prices, so a rally in gilts means the interest rate the government pays to borrow has fallen at the margin.

What to watch: how long the pause lasts, whether it reflects temporary market conditions or a broader shift in the Bank's approach to shrinking its balance sheet, and how sterling and UK rate expectations respond. Investors should note that a pause is not the same as a reversal — the Bank's holdings remain large, and future sales decisions will depend on economic and financial conditions.