The U.K. reduced the Bank of England’s Asset Purchase Facility ceiling to £482.4 billion, matching the portfolio’s Nov. 4 value as holdings continue to decline.
Chancellor of the Exchequer John Healey and Andrew Bailey, governor of the Bank of England, confirmed the new limit in letters exchanged Nov. 10. The earlier ceiling was £524.9 billion, a level approved in a May 5, 2026, exchange. HM Treasury said the latest agreement lowers the maximum to reflect the facility’s reduced size.
Under the revised cap, £362.4 billion is assigned to monetary policy. Another £120 billion is reserved for the longest-maturity gilts, which help support banknote issuance. The two amounts account for the full ceiling, with the banknote-related allocation distinct from the monetary policy portion.
The letters put APF holdings at £482.4 billion on Nov. 4. That was £412.5 billion below the facility’s January 2022 high of £894.9 billion, a 46% decline.
Officials agreed in February 2022 to revisit the ceiling every six months and adjust it as the APF contracts. The next review is due in six months, alongside the relevant APF Quarterly Report. Under the arrangement, the ceiling is recalibrated as holdings fall.
The Monetary Policy Committee aims to finish unwinding the APF’s monetary policy portfolio by the end of 2034. Its plan calls for annual gilt sales worth £20 billion, measured by purchase proceeds. Once the maturity profile is factored in, that pace corresponds to an average yearly reduction of £46 billion in the portfolio’s stock. The separate £120 billion banknote allocation is outside the monetary policy amount.
HM Treasury continues to indemnify APF activities under an arrangement established in 2009. The letters say officials will monitor risks to the Exchequer and manage any cash transfers under the indemnity.
The Bank is due to explain how the multi-year unwind will operate by April 2027. A plan to sell gilts to the government instead of investors requires final agreement with HM Treasury. The cap is due for another review in half a year, alongside the relevant APF Quarterly Report.
