Reform rips into Bank of England’s ‘misuse of taxpayers’ cash’ after Bailey’s warning | UK | News | EUROtoday

Reform UK has slammed the Bank of England (BoE) for losing billions of kilos of hard-earned, taxpayer’s cash. Deputy chief Richard Tice has written a scathing letter to Andrew Bailey, the Governor, slamming the Bank’s money-printing scheme, outlining the “strain” and “pressure” that the nation’s accounts are already underneath.

In the letter, Mr Tice claimed that paying curiosity on money within the Bank, in addition to promoting authorities bonds at a loss, is a “systemic misuse of taxpayers’ money”. Reform now claims it might save the nation an eye-watering £35billion a 12 months by eliminating curiosity on central financial institution reserves which is a part of the BoE’s quantitative easing (QE) programme, created to spice up the economic system. Nigel Farage’s get together would use the cash saved from chopping the scheme to pay for the rise within the tax-free private allowance to £20,000.

“The Bank of England is unnecessarily wasting tens of billions of pounds of taxpayers’ money, whilst enriching City institutions,” Mr Tice’s letter says, first reported by The Telegraph.

It continues: “The nation’s accounts are already under very severe pressure. QT (quantitative tightening) is also partly responsible for keeping gilt yields higher than they otherwise would be, resulting in even more punitive interest costs, imposing yet more strain on the [public finances].”

Commercial banks at the moment earn curiosity on the base fee on reserves held on the Bank of England. The Bank made income from the QE programme when rates of interest have been at document lows as a result of returns on authorities gilts it purchased being larger.

NatWest, Barclays, Lloyds and Santander have been among the many banks which acquired curiosity on reserves in 2023, totalling a whopping £9billion.

However, Mr Bailey has warned on quite a few events that stopping curiosity funds on reserves might alter the Bank’s means to affect the price of borrowing.

The governor mentioned in a letter to the Treasury choose committee in April: “Remuneration of reserves is a key component of the Bank’s approach to ensuring rate control. Any loss of rate control would undermine the MPC’s ability to affect the real economy with its interest rate decisions and could cause significant harm to credibility of monetary policy.”

A Bank of England spokesman mentioned: “The Governor set out the Bank’s views on the matter in a letter to the Treasury Select Committee.”