The Bank of England received solid demand from investors on Tuesday at its first auction to sell government bonds from its 838 billion pound ($961 billion) quantitative easing stockpile.
The BoE aims to sell 6 billion pounds of gilts across eight auctions in November and December, as part of a plan to reduce its gilt holdings by 80 billion pounds over 12 months through a mix of sales and not reinvesting money from maturing gilts.
Britain's central bank is the first among major economies to start outright sales of government bonds - in part because of the long average maturity of its holdings, compared to those held by central banks in the United States and Canada.
There was little immediate market reaction to the auction result. Benchmark five-year gilt yields held broadly steady at 3.56%, 4 basis points down on the day and little changed from their level before the auction.
Investors bid for 3.26 times the 750 million pounds of gilts with a remaining maturity of three to seven years which the BoE put up for sale.
During standard British government bond auctions held by the United Kingdom Debt Management Office, investors typically bid for just over twice the volume of gilts available. These auctions normally are for larger volumes of gilts than the BoE is selling at its auctions.