The Bank of England’s Monetary Policy Committee unanimously approved a new quantitative tightening (QT) framework to unwind £488 billion in gilt holdings by the end of 2034, at an average pace of £46 billion a year. That is slower than the previous £70 billion annual target. The plan divides the portfolio into £222 billion of gilts maturing by 2035 that will roll off passively, £146 billion to be actively sold at £20 billion a year, and £120 billion of gilts maturing in 2049 or later that will be retained to support banknote issuance. Gilt auctions will pause for six months, with a review due before April 2027, while Bank Rate remains at 3.75% after a 6-3 MPC vote. The announcement pushed UK government bonds higher, lowered long-term yields and slightly weakened the pound. The decision to stop selling the longest-dated gilts is significant because QT since February 2022 has been estimated to have added 20 to 30 basis points to term premia, the extra yield investors demand for holding longer-duration debt. Analysts are also watching whether the Bank routes active sales through bilateral transactions with the Debt Management Office rather than public auctions, as well as the relative performance of gilts maturing between 2035 and 2049.