Investors Urge Bank of England to Halt Costly Bond Sales

Asset managers overseeing over $1.5 trillion urge the Bank of England to halt costly bond sales that strain the UK's debt market. With sticky inflation and high borrowing costs, the central bank's quantitative tightening faces criticism amid heightened fiscal pressure, leading to potential losses for taxpayers.

Asset managers, whose firms oversee assets exceeding $1.5 trillion, are pressing the Bank of England to cease bond sales they claim exacerbate the strain on British government debt. These sales have also led to billions in taxpayer liabilities, according to several influential investors in the UK bond market.

In recent discussions with Reuters, ten investors expressed concern over the current policy. They argued that the slowing pace of bond runoff, as pledged by the central bank on September 18, is insufficient. This debate comes as the UK's long-term borrowing costs top those of other G7 countries.

With sticky inflation and looming fiscal challenges affecting the bond market, known as gilts, yields have been fluctuating. Critics, including RBC BlueBay Asset Management's Mark Dowding, urge the Bank of England to reassess its strategy. Despite some policy adjustments, uncertainty in the gilt market persists.