Live Updates > Live Update Details
2025-09-12 22:02:12
[Countdown to Bank of England's QT decision, the bond market ushers in a key indicator] ⑴ The Bank of England is expected to keep interest rates unchanged at its September meeting, but the market focus is on the decision on the scale of quantitative tightening (QT) in the new fiscal year starting in October. The current high government bond yields have prompted investors to expect the QT target to be reduced from 100 billion pounds to 72 billion pounds. ⑵ The central bank's survey showed that the median market expectation points to a QT scale of 72 billion pounds. If the original target is maintained, it may trigger sharp fluctuations in the bond market. Officials' previous assessment showed that QT has a cumulative impact of about 15-25 basis points on 10-year government bond yields. ⑶ Although QT has limited direct impact on the pound, slowing the pace of balance sheet reduction may be interpreted as a dovish signal, which will have a superimposed effect with the interest rate policy and further affect the pound's exchange rate trend. ⑷ The gap between policy predictability and market expectations will become a key risk point. Any decision that exceeds expectations may trigger a knee-jerk rise in gilts.
