The Liberal Democrats have expressed their commitment to uphold the independence of the Bank of England (BoE) amidst calls from Reform UK leader Nigel Farage to terminate its bond-selling program. This statement follows a meeting on Friday between party leader Sir Ed Davey, his deputy Daisy Cooper, and BoE Governor Andrew Bailey.
Farage met with Bailey two weeks prior to advocate for the cessation of the BoE’s quantitative tightening efforts, which he claims have significant financial implications for taxpayers and contribute to rising national debt. In response, Sir Ed criticized Farage for prioritizing personal ambitions over the interests of the British public.
The Liberal Democrats have indicated their intention to confront Reform UK, with Sir Ed emphasizing the party’s moral obligation to challenge Farage. Following his meeting at the BoE’s headquarters, he underscored the importance of the central bank’s autonomy as a safeguard against potential economic instability, drawing parallels to the situation in the United States under former President Donald Trump.
While acknowledging the need for modernization within the BoE, Sir Ed reiterated that maintaining its independence is vital for managing economic factors such as food prices and mortgage rates.
The BoE initiated its quantitative tightening program in 2022 as a means of reversing the stimulus measures introduced during the 2008 financial crisis. This earlier initiative, known as quantitative easing, involved the creation of funds to purchase UK government bonds aimed at stabilizing the economy. The current phase includes the sale of these bonds at losses covered by the Treasury under a longstanding agreement.
Reform UK’s deputy leader Richard Tice recently criticized the bond-selling process, labeling it a misuse of taxpayer funds and linking it to an increase in government debt costs, which have recently reached a peak not seen in 27 years. Tice has also called for greater parliamentary engagement on the policy, suggesting that its financial implications warrant discussion among MPs, particularly in light of the upcoming budget considerations. Additionally, both Farage and Tice urged the BoE to adopt a more lenient view on cryptocurrencies, claiming that its current stance could stifle innovation in that sector.
Source: https://www.bbc.com/news/articles/cr70g372m91o?at_medium=RSS&at_campaign=rss