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Hauser does not mention any potential changes to active gilt sales buckets

BOE
  • Nothing in the Hauser speech about changes to gilt maturity buckets for active gilt sales (we have seen some in the market argue that given the collateral shortages the Bank should consider selling 1-3 year gilts).
  • He says: "QE unwind is not the MPC’s active tool for monetary policy tightening. That role is played by Bank Rate. But it does support that tightening process. And it has other important benefits too. It helps alleviate collateral shortages distorting market functioning. It reduces the size of the central bank balance sheet. It helps return public sector interest rate risk exposure to levels closer to those initially envisaged. And it increases the headroom available for future QE, should that ever be needed."
  • And "By skewing QE sales in Q4 to the short and medium-maturity buckets, we have avoided the part of the market most affected by the LDI crisis. Doing so also focuses our initial sales on sectors that have been particularly affected by QE-related collateral shortages, as shown by the elevated gaps between yields on gilts and swaps at the shorter end of the curve"
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