# Bank of England Sets 2034 Target to End Policy Gilt Holdings

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/25370
Published: 2026-09-29T14:03:42.000Z
Updated: 2026-09-29T14:03:42.000Z
Section: Regulation

> The central bank plans £20 billion in annual gilt sales while retaining £120 billion in long-dated bonds to support banknote issuance.

The Bank of England plans to reduce its holdings of U.K. government bonds used for monetary policy to zero by September 2034, extending its quantitative-tightening program while retaining £120 billion in long-dated gilts for banknote backing.

The plan calls for £20 billion in annual gilt sales alongside expected maturities. That would reduce the portfolio by an average of £46 billion a year. The Asset Purchase Facility held £488 billion in September, down from a peak of £895 billion in February 2022.

Of the remaining portfolio, £368 billion is designated for full unwinding. About £222 billion is expected to mature naturally, while £146 billion is earmarked for sales of gilts maturing between 2035 and 2049.

The Bank is considering selling that £146 billion to the U.K. government through a structure involving HM Treasury and the Debt Management Office. The proposal has not received a final decision. Sales would take place at market prices and at a pre-announced pace, with operational details expected by April 2027.

The Bank will retain £120 billion of the longest-dated gilts to indirectly support current and future banknote issuance. The policy means the Bank will continue holding a portion of its bond portfolio even after the policy-related gilt holdings targeted for unwinding reach zero.

Quantitative tightening reverses quantitative easing by allowing assets to mature or selling them. Since QT began in February 2022, about £259 billion of gilts have matured and £129 billion have been sold. About £20 billion of corporate bonds have also been sold or matured.

The Bank estimated that QT contributed roughly 20 to 30 basis points to the increase in U.K. long-term government-bond term premia since the program began. Bank Rate will remain the Bank of England’s active monetary-policy tool, while gilt sales will be gradual, predictable and conducted only in appropriate market conditions.

“The MPC decided to reduce the stock of gilts held for monetary policy purposes to zero,” the Monetary Policy Committee (MPC) said.

Sir David Ramsden, the Bank’s Deputy Governor for Markets and Banking, said in a speech published Sept. 28, “We are now ready to move to the next chapter.” Ramsden said the MPC would ensure the agreed sales pace was implemented and the full unwind completed by the end of 2034.

The Bank’s proposed government-purchase model is expected to have operational details by April 2027, while the gilt sales program continues toward the September 2034 target.