Bank of England Delays $779 Million Bond Sale After Tariff Turmoil
England’s central bank has postponed a bond sale following an uptick in tariff-related market pressure.
As Bloomberg News reported Thursday (April 10), the Bank of England (BOE) had planned to sell the long-dated bonds under its quantitative tightening program, but decided to pause that sale following a surge in gilt yields fueled by new U.S. tariffs.
The BOE now says it will sell 750 million pounds ($969 million) worth of short-dated debt on April 14, instead of the originally scheduled auction of 600 million pounds ($779 million) longer-maturity gilts in “light of recent market volatility.”
A BOE spokesperson told Bloomberg the decision was made as a “precautionary” measure and that the bank plans to sell the long-term debt in the following quarter.
Bank of England Deputy Governor Sarah Breeden said in a question-and-answer session that the decision was a “technical” one and “nothing to do with the monetary stance.”
“Given the kinds of volatility that we’ve been talking about and seeing in global markets, my colleagues in the markets area judged that it was wise as a precaution to switch the planned order of our sales,” she said.
The last week has seen a wave of market turmoil following the imposition — and pausing — of tariffs by President Donald Trump.
“The pause provided temporary relief to many industries and markets, as seen in the Dow Jones surge by nearly 2,200 points,” PYMNTS wrote.
“However, companies and economists remain cautious about its long-term implications. The freeze does not eliminate tariffs entirely, leaving uncertainty about future trade policies but also pulling the covers on what companies may do if the temporary freeze is lifted for an appreciable amount of time.”
If the tariffs had stayed in place, that report added, companies across a range of sectors were ready to pass increased costs onto consumers. For example, grocery chains like Morton Williams projected price hikes of up to 20% on imported items such as olive oil and canned tuna because of the tariff impacts.
Retailers such as Target had already adjusted their inventory strategies earlier in the year to mitigate immediate price shocks but warned of significant increases for perishable goods like fresh produce within weeks.
“Similarly, manufacturers reliant on imported components faced significant challenges,” PYMNTS wrote. “PepsiCo noted declining snack sales due to inflationary pressures even before the tariff announcements. If sustained, higher tariffs could have exacerbated these trends, forcing companies to shrink product sizes (shrinkflation) or reduce offerings altogether.”
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