Volatility in British market adds to expectations of Bank of England halting bond sales

Strategists at Bank of America and BNP Paribas are bullish on UK long-maturity gilts, expecting the Bank of England to halt debt sales from October. That view was reinforced by the central bank's unusual decision to postpone an auction of securities in March amid turmoil in global markets.

The bond sales are part of the Bank of England's efforts to unwind its massive economic stimulus after the financial crisis and the pandemic. 

Agne Stengeryte and other Bank of America strategists said the UK central bank is closely monitoring the situation and is likely to register a strong impact of its quantitative tightening program on financial market conditions.

The country's 30-year debt has been hit hardest by political and economic turmoil of recent years as demand from traditional investors, including pension funds, has waned. Consequently, the UK Debt Management Office has announced a historic shift toward less long-term debt this year.