According to reports, the Bank of England could soon suspend its sales of long-dated government bonds that were accumulated during the financial crisis and the pandemic, as yields on these securities have climbed to multi-decade highs.

Officials from the central bank, the UK Treasury, and the Debt Management Office have reportedly drafted plans for this potential shift, though the reports did not cite specific sources. A final decision, however, still rests with the Bank of England.

Market participants anticipate that over the coming 12 months starting in October, the central bank will reduce the pace of its quantitative tightening to £50 billion annually. This would still leave active bond sales at approximately £20 billion. Since long-dated gilts account for only about 20% of the current active sales program, halting them would have a relatively modest impact on the broader balance sheet reduction timeline.

The Bank of England's Monetary Policy Committee (MPC) is set to decide the quantitative tightening (QT) plan for the next fiscal year on Thursday. The central bank is currently facing significant losses due to the sharp decline in prices of 20-year and 30-year gilts. At present, the yield on 30-year bonds stands at roughly 5.9%, a level not seen since the 1990s.