World Economy

Bank of England Holds Rates, Eliminates Long-Dated Gilt Sales

The Bank of England kept its benchmark interest rate steady at 3.75% while signaling potential future increases if inflationary pressures mount amid Middle East tensions. The central bank simultaneously announced a significant overhaul of its quantitative tightening strategy, scrapping plans to sell long-dated gilts. The move affects a £488 billion portfolio scheduled for unwinding through 2034. Long-dated gilt yields eased following the announcement as investors repositioned ahead of the policy shift. The BOE's decision balances competing pressures: containing inflation risks while avoiding aggressive tightening that could strain financial markets and economic growth.