Chancellor John Healey and the Governor of the Bank of England have agreed to reduce the maximum authorised size of the Asset Purchase Facility from £524.9 billion to £482.4 billion.
The new ceiling is made up of £362.4 billion of gilts held for monetary-policy purposes and £120 billion associated with backing current and future banknote issuance.
The reduction follows the continuing run-off and sale of assets bought under quantitative easing. The monetary-policy portion is being unwound at an annual sales pace of £20 billion in purchase-proceeds terms, with an average stock reduction of about £46 billion a year.
The government expects that part of the portfolio to be fully unwound by the end of 2034. The Treasury will continue to indemnify the Bank and monitor risks to public funds.
The decision changes the authorised ceiling to reflect the smaller portfolio. It is not a new public-spending allocation and does not itself set interest rates, which remain a matter for the independent Monetary Policy Committee.
