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The report included updated projections of future APF cash flows under a range of scenarios. The estimates remain highly sensitive to future bank Rate paths and the pace of gilt unwind. nwind £100bn of UK government bond holdings between October 2024 and September 2025.

The APF was introduced in 2009 as part of its quantitative easing strategy during the global financial crisis, and expanded significantly during the COVID-19 pandemic. Gilts held under the facility peaked at around £875bn in 2022 before the MPC shifted toward reducing the balance sheet.

According to the latest quarterly report published on Tuesday, a total reduction of £32.5bn in gilt holdings was recorded from April to June 2025. 

This includes £2.9bn from outright sales and a further £29.6bn from maturing gilts. As a result, the total stock of gilts held for monetary policy purposes stood at £590bn as of 30 June, down from £622.5bn at the end of the first quarter.

Threadneedle Street held three gilt sale operations during April alone, and has already published the schedule for third-quarter gilt sales on 20 June, to continue to reduce its balance sheet.

The report included updated projections of future APF cash flows under a range of scenarios. The estimates remain highly sensitive to future bank rate paths and the pace of gilt unwind.

Assuming the current £100bn annual pace, the net present value of cumulative cash flows is estimated at around -£115bn, the report said.

It comes as the BoE cut interest rates to 4% last week, the fifth cut in a year, as the UK economy struggles amid high inflation and a stagnant jobs market.

The 25 basis point reduction is expected to ease pressure on mortgage holders and homebuyers, potentially unlocking more affordable borrowing options.

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This move brings borrowing costs back to levels not seen since March 2023, the lowest in two years.

The MPC voted by a majority of 5–4 to reduce the bank rate by 0.25 percentage points, to 4%, rather than maintaining it at 4.25%.

Andrew Bailey, BoE governor, said on Thursday: “We’ve cut interest rates today, but it was a finely balanced decision. Interest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully.”

The unprecedented split saw governor Bailey force the monetary policy committee to vote twice after a deadlocked initial vote. It was the first time in MPC history that the committee had to hold two rate votes.