Bank of England urged to slow or halt bond

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Published: 2026-09-15T04:24:08.280Z • Permanent link

Economists have urged John Healey, the Chancellor of the Exchequer, to press the Bank of England to slow down its bond-selling activities. This call to action comes as the Bank of England's decision to sell off its £130 billion bond portfolio has been criticized for costing the exchequer billions of pounds. The Bank's bond-selling strategy has been in place since 2019, with the aim of reducing the central bank's balance sheet and reducing the risk of inflation.

Specifically, the Bank of England has been selling off its gilts, which are government bonds that mature in less than 10 years, to raise cash for its quantitative easing program. However, the Bank's decision to sell off its bonds has led to a decrease in the value of the bonds held by pension funds and other investors, resulting in significant losses. According to a report by the Institute for Fiscal Studies, the Bank's bond-selling activities have cost the exchequer an estimated £3 billion in lost tax revenue since 2019.

The criticism of the Bank of England's bond-selling activities has been echoed by several prominent economists, including Paul Krugman, who has argued that the Bank's decision to sell off its bonds has been a "mistake" that has led to a decrease in the value of the pound. Krugman has suggested that the Bank should instead focus on supporting the economy through monetary policy rather than trying to reduce its balance sheet.

The impact of the Bank of England's bond-selling activities on the Data Sources domain has been significant. The Bank's decision to sell off its bonds has led to a decrease in the value of gilts held by pension funds and other investors, resulting in significant losses. This has had a ripple effect on the entire financial market, with many companies and investors struggling to come to terms with the decrease in the value of their bonds.

Several research communities have been affected by the Bank's decision to sell off its bonds, including the Centre for Economic Performance at the London School of Economics. The Centre has published several reports on the impact of the Bank's bond-selling activities on the economy, highlighting the significant losses that have been incurred by pension funds and other investors. The Centre's research has been widely cited by policymakers and financial experts, and has helped to shape the public debate on the issue.

The Bank of England's decision to sell off its bonds is part of a larger pattern of monetary policy decisions that have been made by central banks around the world. In recent years, many central banks have been reducing their balance sheets and selling off their assets in an effort to reduce inflation and support economic growth. However, this approach has been criticized for its potential risks, including the risk of asset bubbles and decreased economic stability.