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2025-09-15 19:08:56
Is the British Pound "Hanging on a Thread"? The Bank of England's Decision Could Trigger a Bond Market Selloff. (1) A report from HSBC foreign exchange analysts indicates that if the Bank of England maintains its current pace of quantitative tightening (QT) at its meeting this Thursday, thereby putting upward pressure on UK government bond yields, the British Pound could face downside risks. (2) Data shows that the Bank of England has reduced its holdings of UK government bonds by a cumulative £100 billion since October of last year. A recent survey of market participants indicates that the median market expectation for the scale of QT over the next 12 months has slowed to £72 billion. (3) Analysts believe that the foreign exchange market is closely watching the trends in long-term bond yields in countries with heavy fiscal burdens, including the UK. Therefore, any decision by the Bank of England on quantitative tightening could become a key variable influencing the British Pound's performance.
