Gilts rally as Bank of England pauses bond sales - The Times

UK government bonds, known as gilts, rallied after the Bank of England paused its programme of active gilt sales, according to The Times. The decision means the central bank is temporarily stepping back from actively reducing the stock of bonds it holds, a process often described as quantitative tightening. When the Bank refrains from selling, less supply reaches the market, which can support prices and push yields lower — the dynamic behind the rally.

The pause matters because gilt yields feed directly into UK borrowing costs, mortgage pricing and the discount rates investors apply to equities. A sustained fall in yields can ease conditions for rate-sensitive sectors and for the government's debt-servicing bill, though the underlying stock of bonds remains large.

What to watch: how long the pause lasts, whether it signals a broader shift in the pace of balance-sheet reduction, and the Bank's accompanying commentary on inflation. Markets will also weigh upcoming issuance plans and economic data, since those factors ultimately shape whether the rally holds or fades.