Reshaping UK and European credit: the corporate bond unwind

While much focus has been upon central banks propping up government bond markets through quantitative easing, it is often overlooked that they have been influential buyers of corporate bonds – in Europe and the UK since 2016. Purchases were stepped up during the pandemic to shore up growth, with the European Central Bank (ECB) corporate sector purchase programme (CSPP) and the BoE corporate bond purchase scheme (CBPS) accumulating nearly EUR€£350 billion and £19.1 billion of investment grade (IG) bonds, respectively.