Week Ahead

The highlight of the week ahead will be the Bank of England meeting with both the Monetary Policy Report and Fiscal Policy Report due to be released on Thursday at 7:00BST. We will preview this meeting in full in our Bank of England preview and there are a number of aspects of policy due to be discussed: forecasts, potentially the results of the effective lower bound review and the pace of QE going forward.

Last week the DMO released its auction calendar for the September to November period and it was very close to our expectations. In the April-July period the DMO raised GBP241bln. We assume auction sizes consistent with those seen recently, around half of the available PAOF proceeds taken up at each auction and a syndication programme of GBP9.0bln. This would see the DMO narrowly overshoot its GBP385bln funding target, raising GBP401bln by the end of November. Although the DMO has kept the ranges for auction sizes unchanged, we have recently seen a couple of slightly smaller auctions than previous taps of the same gilts earlier this fiscal year. For example last week's auction of the 0.125% Jan-23 was for GBP3.50bln (down from GBP3.75bln at the previous auction) and this week's auction of the 0.375% Oct-30 is GBP2.75bln (down from GBP3.00bln at the previous auction). It will be worth watching auction sizes in the weeks ahead to see if this is the beginning of a trend.

For the full document see the MNI Gilt Week Ahead by clicking here.