Nigel Farage has intensified his advocacy for the Bank of England to cease its bond-selling program during his inaugural formal meeting with Governor Andrew Bailey. The Reform UK party claims that this process, known as quantitative tightening, imposes significant financial burdens on taxpayers and escalates government debt costs. During the meeting, Deputy Leader Richard Tice emphasized the importance of supporting Labour MP Rachel Reeves as she prepares for her upcoming Budget announcement at the end of November.
The Bank of England initiated its quantitative tightening program in 2022 to reverse earlier measures taken since the 2008 financial crisis aimed at stimulating the economy. Known as quantitative easing, these measures involved the creation of substantial sums of money to purchase UK government bonds, thus maintaining low market interest rates. The Bank had previously implemented similar rounds of quantitative easing during various crises, including the Brexit referendum and the COVID-19 pandemic.
Currently, the Bank of England is selling these bonds at a loss, with the Treasury absorbing the financial shortfall due to an agreement made in 2009. Tice criticized this approach, labeling it a “systemic misuse of taxpayers’ money” in correspondence to Bailey earlier this year. He further pointed to rising long-term government debt costs, which have reached a 27-year peak.
Following their meeting, Tice urged lawmakers to engage more actively in discussions about the current monetary policy, suggesting that the significant financial implications of quantitative tightening should concern Parliament. He noted that the Bank recently announced a slowdown in its bond sales, reducing the annual target from £100 billion to £70 billion.
Moreover, Farage inquired about the Bank’s stance on cryptocurrency regulation, arguing that current policies hinder innovation. Reform UK has proposed to position the UK as a hub for cryptocurrency by introducing a pilot scheme for select financial institutions and reducing capital gains tax on crypto transactions. Farage previously criticized the Bank for its approach to stablecoins but expressed some optimism following the meeting, stating that Bailey appeared receptive to discussions about regulatory changes. The Bank has described the meeting with Farage and Tice as productive but refrained from commenting on specific discussion details.
Source: https://www.bbc.com/news/articles/c3vz1q5k62eo?at_medium=RSS&at_campaign=rss