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BOE’s Top Economist Rejects Calls to Cut Interest Paid on Reserves

  • BOE chief economist says system shouldn’t be used to tax banks
  • Some see payments as a QE windfall for high street lenders
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Bank of England Chief Economist Huw Pill dismissed calls for the central bank to cut the interest it pays on reserves held by commercial lenders.

He said the BOE could pay nothing on some of the roughly £850 billion ($1.03 trillion) of deposits, potentially saving the taxpayer tens of billions of pounds. But insisted he was “not a fan of the proposal” and that a cleaner approach would simply be to tax the banks.