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Bank Of England Learns About Supply And Demand

The key to buying bonds, it seems, is getting someone to sell them
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Diego Delso [CC BY-SA 4.0], via Wikimedia Commons

Diego Delso [CC BY-SA 4.0], via Wikimedia Commons

The central bank’s desire to buy all of the bonds is running right into the fact that not everyone wants to sell them, no matter how badly the Brexit-scarred country needs them to.

On the second day of its new program, the U.K. central bank said it could only buy £1.12 billion ($1.5 billion) of gilts. It said that it wanted to buy £1.17 billion of government bonds, or gilts….

“It would be tough to buy more than £1 to £2 billion a quarter,” said Mike Amey, head of sterling portfolio management at Pimco. “The challenge is the U.K. corporate bond market is not that big.”

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