Data as of: Friday, October 2, 2026 close Issued: Saturday, October 3, 2026 Evidence key: CONFIRMED (primary source), REPORTED (multiple outlets), RUMORED (unverified market reporting), ANALYTICAL (inference).
The Bank of England held Bank Rate at 3.75% on September 17 in a 6–3 vote — dissenters wanted 4% — while forecasting inflation near 3.75% by end-2026 and about 4% in early 2027. But the bigger decision was on quantitative tightening: a 9–0 vote to stop outright long-dated gilt sales and pause all active sales until April, while consulting on transferring sale operations to the Debt Management Office.
The plan now runs the £488 billion gilt stock to zero by September 2034: £120 billion of 2049-plus gilts retained permanently to back banknotes, £222 billion allowed to mature, £146 billion sold actively at roughly £20 billion a year. Average unwind runs about £46 billion a year including maturities, down from the £70 billion pace of the past year.
The context is a gilt market under severe strain. The 10-year hit 5.51% mid-week (highest since July 2007); the 30-year crossed 6.03% (first since January 1998). The UK 10-year remains the highest in the G7, about 23bp above Treasuries — with sterling falling, the classic signature of a fiscal risk premium rather than carry attraction. Markets price BoE hikes in November and December plus another in February. Chancellor Healey’s first Budget on October 28 is expected to raise taxes; higher yields have already erased about £10 billion of fiscal headroom.