(Bloomberg) -- The Bank of England will review its plan for asset sales under quantitative tightening this summer, when it will decide whether to “speed up or slow down” the program, Chief Economist Huw Pill said.

Last year the UK central bank started to offload the £875 billion ($1.1 trillion) of government bonds added to its balance sheet during a decade of quantitative easing purchases. It started by not replacing bonds that mature and since then stepped up to active sales of assets. 

The portfolio topped out at £895 billion, including government bonds known as gilts and corporate bonds. The current plan is to reduce the portfolio by £80 billion over 12 months to this November, with £45 billion from active sales. 

“The bank is on track” with the current sales plan, Pill said at a web event hosted by the bank on Friday. “We will reassess over the summer as to whether we continue at that pace.”

The pace of future sales will be keenly watched by both the government and the markets as the government must raise £305 billion next year, the second highest cash requirement on record. The BOE will be competing against the Treasury for investor appetite, which may push up government borrowing costs.

Pill said the question would be whether to go faster or slower. “We will certainly be continuing to proceed with quantitative tightening, a rundown of this portfolio over the coming years,” he said. “We still owe a very large number of government bonds because QE easing was so large. This process of QT is likely to run in the background.”

The BOE has reduced its government bond portfolio to £826.5 billion since the first maturing bonds were allowed to run off in March last year. It has also been reducing its corporate bond portfolio. It has just £11.5 billion of the £20 billion corporate bonds left to dispose.


--With assistance from Andrew Atkinson.

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