The Bank of England, it seems, really did mean it when it said it would start selling gilts under its quantitative tightening, or QT, programme at the end of the month. OK, there will be a delay of a day because of the central banking equivalent of a TV scheduling clash – the chancellor will deliver his full medium-term fiscal plan on 31 October. But Threadneedle Street says it intends to press the QT button on 1 November.
One can understand, of course, the desire to crack on with the job, since there has already been one postponement. That occurred on 28 September when the Bank was diverted by Kwasi Kwarteng’s disastrous mini-budget. Gilt yields surged, causing chaos for pension funds and creating a threat to UK financial stability. The Bank was bounced into becoming a temporary buyer of gilts – to the tune of £19bn – instead of a seller.
