Market Notice
At its September 2024 meeting, the MPC voted to reduce the stock of gilts held in the APF by £100 billion over the period from October 2024 to September 2025, to a total of £558 billion.
The Bank set out in the consolidated APF gilt sales Market Notice published on 1 September 2022 that it would publish a quarterly schedule for the sales of gilts held in the APF for monetary policy purposes. The details and schedule for the Q4 2024 sales of such gilts are set out in this Market Notice, which covers the period from 7 October 2024 to the week commencing 21 October 2024.
As set out in the 15 December 2023 Market Notice, the Bank will set a schedule of auctions in order to continue to reduce the APF as evenly as possible across maturity sectors, measured in initial proceeds terms. The maturity sectors are defined as gilts with a residual maturity of between: 3-7 years (short), 7-20 years (medium) and over 20 years (long).
The Bank will continue to hold auctions in each quarter over the next twelve months. However, due to the high amount of gilt holdings that are maturing throughout the year, a lower number of auctions is required in each quarter to meet the MPC’s target reduction of the APF, compared to previous years. The Bank will schedule these auctions towards the start of each quarter.
To reduce the APF as evenly as possible across maturity sectors, measured in initial proceeds terms, over the year, the size and number of auctions will vary across maturity sectors in each quarter. The Bank expects to hold one auction in each of the maturity sectors in each of the first three quarters, while the final quarter (Q3 2025) is likely to consist of only short and medium maturity sector auctions, depending on the movement in gilt prices and the realised distribution of sales throughout the year.
Accordingly, in Q4 2024, the Bank will sell short maturity sector bonds across one auction of £800 million, medium maturity sector bonds across one auction of £750 million, and long maturity sector bonds across one auction of £600 million. Further details are outlined in the table below.
Other than as amended in this Market Notice, the detailed operational parameters and participation requirements set out previously will apply to these gilt sales.
The Bank will continue to monitor the impact of its gilt sales programme on market conditions, and reserves the right to amend its schedule, including the gilts to be sold and the size of its auctions, or any other aspect of its approach at its sole discretion.
The Bank expects to announce the sales schedule for Q1 2025 at 4.30pm on 20 December 2024.
Table: APF gilt sales auction calendar – October to December 2024
| Auction date | Maturity sector | Auction size |
|---|---|---|
| Monday 7 October | Long | £600mn |
| Monday 14 October | Short | £800mn |
| Monday 21 October | Medium | £750mn |