The Bank of England urged to reduce bond sales. Investors say, “Can” sell “” sale “

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The Bank of England faces increasing calls to expand its sale program in bonds later this year, as investors warn against risk to raise borrowing costs more and add to the weakness of the British economy.

The central bank has shrunk its portfolio from accumulated bonds during cash mitigations over the past decade and half, as it tries to restore its public budget to a more natural size.

Unlike the Federal Reserve and the European Central Bank, the quantitative tightening voltage (QT) requires the active sales of bonds, instead of just allowing property to mature. Investors argue that this leads to an increase in the return on government debts in the long term during a volatile talisman for global bond markets, and increasing borrowing costs throughout the economy even while reducing the central bank of the short -term interest rate, and adds to pressure on public financial resources.

“The Bank of England must stop the active QT,” Ben Nicole, the director of the higher funds at Royal London Asset Management.

The Monetary Policy Committee of the Bank of England is scheduled to determine its 12 -month plan for QT in September, which will enter the following month. Its shares have been reduced by 100 billion pounds this year to 560 billion pounds, through a combination of active sales and old debts.

If QT continues at the same pace, active sales will need to rise to 52 billion pounds in October from 13 billion pounds this year due to shares smaller than maturity debts, according to Nicole.

He said that active sales on this range “can” raises concerns about the market about the total amount of Gilts, especially long -ripe Gilts, which the market may have to absorb this year. “

Mahmoud Bradhan, the global president of the overall economy at Amundi Asset Management, said that the Bank of England “is trying to reduce the size of its public budget faster than it needs and can be pressured to show some flexibility.”

He added: “The Bank of England should not adhere to a pre -specific program of QT, but be ready to adapt in the event of external trauma, such as infection from American bond yields.”

Andrew Billy, the governor of the Bank of England, told the House of Lords on Tuesday that the Central Bank will soon start an internal review of the program before its decision in September.

On average market participants expect that QT will slow down to 75 billion pounds in 2025-2026, according to a survey of the Bank of England in April.

Billy said that the QT decision “will be more interesting this year” due to pressure on long -term government debt, although he said that the process of reducing the Public Budget of England did not bear responsibility for the high revenues of the sect, which reflects moves in other large bond markets.

His colleague at the Catherine Man average He said In this month’s speech, it was important to consider the interest rate decisions from QT and BOE together, “especially at a time when these tool behaves in different directions.”

Fund managers refer to the long -term borrowing costs in the UK, which are more than 5 percent on the 30 -year bonds are already the highest in the seven group, as a reason for behavior.

“While reducing the public budget (BOE) is part of the wider normalization process, he should not work on the automated pilot, if he risks thus destabilizing the same markets that depends on” to transfer his monetary policy, “said Fraser Longy, the head of the fixed income at Aviva Investors.

The long -term government debt was a pressure point across the global markets. The costs of borrowing in the United Kingdom for 30 years receipt The highest levels since 1998 in its repercussions from Blitz “Tahrir Day” in Donald Trump, and the returns that have been leased long ago increased faster than short -term rates. The United Kingdom has already responded Expansion Long -term debt version.

Mark Daving, the chief investment official for fixed income at RBC Bluebay Asset Management, called for BOE to “cancel” active sales, which he said put “upward pressure” on the returns.

The banking of the Bank of England, with the relaxation of its quantitative dilution program, also has effects on public financial resources, is already under severe pressure. Billy refused analysis From economists, the general program is very expensive compared to those in the Federal Reserve and other central banks, focusing on the long -term benefits of QT.

The Bank of England rejected the comment.

Neville Hill Hilly Economic Consulting said that the combination of the new Gilts version to finance the budget deficit while selling the bank Bond Holdings is a “big and continuous demand” for bond markets.

He said: “Given the level of borrowing costs and their febrile nature – partially thanks to the massive borrowing needs of the United States – this appears to put it frankly,” he said.