Without the cooperation of the governor, any potential government would have to modify the official mission of the Bank to implement this policy.
But the BoE’s reformed interventions do not stop there. Due to its policy of quantitative tightening, the Bank is currently selling a large number of assets at a loss. Reformers would prefer that the Bank wait until they mature so that their face value can be returned to them in full.
Unless QT stops immediately, Reform said, the BoE will suffer an additional £50 billion in losses, equivalent to the £50 billion it has already suffered from the policy in 2023.
“I’ve been raising this issue for over 12 months,” said Richard Tice, Reform Party chairman and former asset manager. “The fact that neither the Chancellor, nor the Treasury, nor the Bank of England have proven why I was wrong, but have remained silent on this issue, is because they are embarrassed to admit that I “I’m right,” he said.
But not everyone was convinced. Although Tice verified his name in the press release, Paul Johnson, director of the Institute for Fiscal Studies, distanced himself from the policy, saying it would raise “well less than half” of the $40 billion. of pounds sterling proposed, and even then only. for a short period, as the amount saved would decrease as the BoE cuts rates further.
“The tens of billions in proposed tax cuts should therefore be financed shortly by specific tax increases or spending cuts elsewhere,” Johnson said via X.
The Bank of England declined to comment.
Politico
