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What signal does the Bank of England suddenly slam on the brakes on its quantitative tightening program? ⑴ The Bank of England announced Thursday that it would slow the pace of quantitative tightening, reducing its government bond reductions to £70 billion between October 2025 and September 2026 from £100 billion over the previous 12 months. This marked the first adjustment to the pace of reduction since the bank began shrinking its balance sheet in 2022. ⑵ The Monetary Policy Committee voted 7-2 to keep the benchmark interest rate unchanged at 4%, in line with market expectations, while also slightly raising its third-quarter economic growth forecast from 0.3% to 0.4%. ⑶ The bond sales structure underwent a significant shift, with short-term, medium-term, and long-term government bond sales now split 40:40:20 over the next year. Previously, bonds of all maturities were sold evenly. This shift was intended to alleviate pressure on the long-term bond market. ⑷ Disagreements emerged within the policymaking ranks, with Chief Economist Peel advocating for maintaining the £100 billion reduction, while Mann called for a sharper reduction to £62 billion, indicating differing views among policymakers on market tolerance. ⑸ UK 30-year government bond yields hit their highest level since 1998 earlier this month, putting pressure on Chancellor of the Exchequer Reeves. This slowdown in the pace of QT is believed to help ease tensions in the bond market. ⑹ The inflation outlook remains uncertain. The Bank of England expects inflation to peak at 4% this month and then decline slowly, returning to its target level of 2% until the second quarter of 2027. ⑺ Market expectations are becoming more cautious. According to LSEG data, traders' expectations for the probability of further interest rate cuts this year have only risen slightly from 32% to 37%, indicating that the market believes the Bank of England will maintain a cautious policy stance.