Bank of England postpones long-dated gilt auction due to market turmoil

LONDON, April 10 (Reuters) - The Bank of England said on Thursday that it was postponing an auction of 600 million pounds ($773.82 million) of long-dated government bonds due on April 14 "in light of recent market volatility".

British 30-year government bonds recorded their sharpest one-day fall since October 2022 on Wednesday, pushing yields to their highest since 1998, after U.S. President Donald Trump stepped up tariff plans.

The gilts reversed most of those losses on Thursday after Trump late on Wednesday said he would temporarily suspend many of the tariffs.

The BoE said the long-dated gilt sale - part of the BoE's efforts to reduce the huge stockpile of bonds it built up between 2009 and 2021 as part of its quantitative easing - would be delayed until the following quarter.

The central bank said would hold an auction of 750 million pounds of short-dated government bonds on April 14 instead.

"Sales are being conducted so as not to disrupt the functioning of financial markets, and only in appropriate market conditions," the BoE said in a statement.

The initial start of the sales programme in 2022 was delayed by bond market turmoil that forced a BoE intervention following former Prime Minister Liz Truss' poorly received budget plans.

Finance minister Rachel Reeves said on Tuesday that BoE Governor Andrew Bailey had assured her that financial markets were functioning effectively.

($1 = 0.7754 pounds)