Bank of England's Bond Sales Spark Concerns of Selling Gold at the Bottom
Originally Published 2 years ago — by CNBC
The Bank of England's rapid pace of bond sales is causing concern among investors, with some likening it to "selling gold at the bottom." The central bank is unwinding its holdings of UK government bonds, known as gilts, which were accumulated during the 2008 financial crisis. The Bank of England has been the most aggressive among central banks in selling these bonds, leading to significant losses that are being backstopped by the UK Treasury. The pace of sales has put downward pressure on gilt prices and raised fears that the market may struggle to absorb the supply. However, some investors see this as an opportunity, as inflation eases and peak interest rates approach. The Bank of England's Monetary Policy Committee is due to meet on September 21, where further details on gilt sales may be provided.