Bank of England considers reducing its holdings of government bonds. Bailey said this year's decisions have "more highlights".

The Governor of the Bank of England, Bailey, stated this week that the central bank is about to launch its annual review of its "quantitative tightening" (QT) policy and is expected to make a decision in September on whether to continue the large-scale selling of government bonds. He emphasized that this year's decision will be "more complex and more intriguing" due to the significant sell-off of long-term government bonds in the market. Bailey pointed out in a parliamentary hearing on Tuesday that this review "may start in the near future," and the evaluation results will directly impact whether the Bank of England maintains the current pace of reducing 100 billion (approximately $135 billion) in debt per year. He stated that the evaluation process will focus on the recent sharp increase in long-term government bond yields in the UK, but he also noted that similar phenomena are widespread in major global economies and cannot be entirely attributed to the Bank of England's quantitative tightening. "This year's situation is more complex because the yield curve has steepened significantly," Bailey said. "However, this is widespread in major economies, and I don't believe it is solely a result of QT. But we must pay attention to the interaction of these factors because this is a relatively new area." According to the current policy of the Bank of England, government bonds on its balance sheet will be reduced by not reinvesting the proceeds of maturing bonds, plus actively selling them, with the current plan to maintain the annual reduction scale at 100 billion. However, some bond analysts believe that due to increased market volatility, the Bank of England may slow down this reduction pace after October. Bailey pointed out that the central bank's core objective is to gradually guide the market to move away from the high liquidity injected by quantitative easing policies over the long term and shift towards providing funding support through repurchase operations. This transition may bring risks of increased market volatility, so the Bank of England is closely monitoring whether there are signs of tension in the sterling money market. In April of this year, the Bank of England postponed a planned sale of long-term government bonds due to market volatility, demonstrating its high focus on market stability.