PostThe Bank of England held at 3.75% with a 6-3 vote — Pill, Greene and Mann wanting a hike — and Bailey warned that "the r…

The Bank of England held at 3.75% with a 6-3 vote — Pill, Greene and Mann wanting a hike — and Bailey warned that "the risks to inflation remain to the upside," adding that the case for raising rates is building if the energy shock persists. Hawkish, then. And yet gilt yields fell some 10 basis points and sterling weakened, because the real news was the quiet surrender on quantitative tightening. Of the £488 billion runoff, the Bank will now keep £120 billion of gilts maturing in 2049 or later, let £222 billion run off naturally, and sell only £146 billion at £20 billion a year, possibly via the DMO — with all planned QT auctions paused until April. In plain English: the biggest seller of long gilts has withdrawn from the long end. The stated reason is the £110 billion of cumulative losses handed to taxpayers since 2022. The actual reason is that the market could no longer absorb the supply at tolerable yields.