BoE’s Bailey Flags Bond Curve Steepening as Key QT Factor

Bank of England Governor Andrew Bailey said the central bank will scrutinise the recent global steepening of bond-yield curves when it makes its annual decision on the pace of quantitative tightening. Bailey described the future path of QT as “an open decision,” underscoring that shifts in market interest-rate dynamics could influence how quickly the BoE allows its gilt portfolio to run off. Yield curves in major sovereign markets have steepened in recent weeks as investors push long-term rates higher relative to short-term benchmarks. Bailey signalled that the BoE will weigh those developments to ensure QT does not amplify volatility or tighten financial conditions more than intended.