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Long-end gilt purchases results due shortly after 14:45BST

GILTS
  • Note that yesterday's operation saw a low take up of GBP1.025bln (out of a maximum GBP5bln).
  • Furthermore, over half of the purchases were of the 1.25% Jul-51 gilt - the on-the-run 30-year.
  • This suggests that there has been very, very little demand from pension funds who are liability matching to sell, but that some newer positions taken on when gilts were bought at auction over the past few months have decided to sell.
  • Potentially yesterday's operation was too soon for some of the slower-moving pension funds to decide what they wanted to sell, so we could see a higher uptake today.
  • At current market prices and assuming the 70% free float limit remains, there are around GBP97.5bln of 20+ year gilts eligible for the BOE to purchase (with a maximum of GBP60bln in the upcoming operations if there is full take up in each).
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