Bank of England and Treasury cut Asset Purchase Facility ceiling to £482.4 billion
On 10 November 2026 the Governor of the Bank of England and the Chancellor agreed to lower the maximum size of the Asset Purchase Facility from £524.9 billion to £482.4 billion.
Author: Thames Compass editorial teamPublished: 2 min read
Contents
Bank of England Governor Andrew Bailey and Chancellor John Healey exchanged letters on 10 November 2026 about the Asset Purchase Facility (APF), the programme under which the central bank holds assets it bought earlier. The APF portfolio consists of UK government bonds (gilts).
New ceiling
Mr Bailey confirmed that the stock of gilts in the APF stood at £482.4 billion on 4 November 2026. The maximum authorised size of the programme can therefore be lowered from £524.9 billion, agreed in the previous exchange of letters on 5 May 2026, to £482.4 billion.
In reply, the Chancellor formally reduced the limit to that amount. Of this, £362.4 billion may be held for monetary policy purposes and £120 billion for the purpose of indirectly backing current and future banknote issuance.
Scale of the reduction
According to the Chancellor's letter, as of 4 November 2026 the APF had been reduced by £412.5 billion from its peak of £894.9 billion in January 2022. That is a 46% reduction in the stock of assets.
The unwind plan
The Monetary Policy Committee (MPC) decided to sell assets at a pace of £20 billion a year (in terms of sale proceeds) until the gilts held for monetary policy purposes are fully unwound by the end of 2034. Taking maturities into account, this equals an average annual reduction in the stock of £46 billion.
The Bank Executive announced that it will not sell gilts with redemption dates earlier than 2035. The longest-dated gilts, worth £120 billion, will stay in the APF to indirectly back banknote issuance.
Sales to government rather than the market
The Governor wrote that the Bank Executive is considering changing how it carries out the remaining sales. It intends to implement the MPC's multi-year plan through sales to the government rather than to the market. For now these are intentions and considerations, not a finalised decision.
The APF's activities have been indemnified by HM Treasury since the programme was set up in 2009. The Chancellor stressed that any future cash transfers will be handled under the terms of the indemnity, as before. He also said the unwind should be carried out in a way that minimises cost and risk.
What this means for you
The documents are technical and do not directly change interest rates or rules on residence, work or taxes. They concern how the central bank's bond portfolio is managed.
Sources
- Exchange of letters between the Governor and the Chancellor on the Asset Purchase Facility - November 2026
- Letter from the Governor of the Bank of England to the Chancellor of the Exchequer 10 November 2026
- Letter from the Chancellor of the Exchequer to the Governor of the Bank of England 10 November 2026
This article was prepared automatically by AI from the listed sources and published without prior editorial review. Spotted a mistake? Use the “Report an error in this article” button.
Photos
- Cover: „london, city of london, landscape, thames, city”, author: IvaIvo, licence Pixabay Content License; cropped or resized.
- Photo 1: „money, bank, notes, bill, bills”, author: PublicDomainPictures, licence Pixabay Content License; cropped or resized.
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