The long and the short of the BoE action

It is nice to know the 'Old Lady' of Threadneedle Street has retained her ability to tease the marke...

It is nice to know the 'Old Lady' of Threadneedle Street has retained her ability to tease the market. Last week's announcement by the Bank of England (BoE) that it was to buy some £75bn of mainly medium and long-dated gilts over the next three months, drove up prices at the longer end of the yield curve. The market had been expecting the short end to benefit from any purchases (gilts with less than five years maturity), but instead the BoE's move pushed up prices of 10, 20 and 30 year gilts by 12.09%, 4.98% and 9.67% respectively. The purchase will be un-sterilised, meaning that once cas...