Bank to push ahead with reversal of its money-printing programme
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Bank of England to roll back its money printing program in early November
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The Bank of England will continue to roll back its money-printing program in early November after it had to deny reports of a delay in the process.
Early this month, Threadneedle Street had made preparations to sell some of the treasury bonds – or government debt – it had bought as it injected billions into the economy during the pandemic.
By selling government bonds, known as “quantitative tightening” (QT), the Bank’s Monetary Policy Committee (MPC) hoped to help reduce inflation by reducing the amount of money in the financial system.
By selling gilts, the Bank of England hoped to help reduce inflation by reducing the amount of money sloshing around the financial system
But after the “mini-budget” sent markets into chaos last month and forced the bank to step in and buy more government bonds to prevent pension funds from collapsing, it decided to delay the start of QT until October 31. .
The Financial Times claimed yesterday that bank officials had decided to push this date back again, fearing the gold market was still “deeply troubled.”
But Threadneedle Street denied this, saying the report that it had “decided to delay sales of gold-plated MPCs is inaccurate”.
The Bank confirmed last night that the reversal of its money printing program would begin on November 1.
But Michael Hewson of trading platform CMC Markets said continuing with QT would be “extremely insane as sentiment remains fragile.”