British Queen celebrates


The Bank of England announced on Tuesday the completion of its corporate bond sale program, having sold nearly all of the 20 billion pounds ($24.8 billion) it had

purchased as part of its quantitative easing (QE) initiative.

The central bank initially started buying corporate bonds in 2016 to provide support to the economy following the Brexit referendum, and it expanded its holdings in 2020 as part of its efforts to mitigate the economic impact of the COVID-19 pandemic.

Sales of the corporate bonds began in September 2022, and last month, the Bank of England indicated that the process would likely be concluded within a few weeks.

Following the final auction on Tuesday, the Bank of England stated that it would retain 833 million pounds of corporate bonds that were close to maturity, unless investors express interest in purchasing them directly.

"As previously announced, a small number of very short maturity bonds will continue to be held in the portfolio, maturing fully by 5 April 2024," stated the Bank of England.

Prior to the commencement of the sale program, the Bank of England faced pressure from environmental campaigners to divest its holdings of bonds from companies such as BP and Rio Tinto.

It's worth noting that corporate bonds constituted only a small fraction of the Bank of England's overall QE program, which peaked at 895 billion pounds in December 2021 and primarily consisted of government bonds.

Currently, the Bank of England is gradually reducing its holdings of government bonds at a rate of 80 billion pounds per year, with the proceeds being utilized through outright sales and not reinvesting the matured bonds. Photo by Katie Chan, Wikimedia commons.