Bank of England Should End Gilt Sales, Former Rate-Setter Says

The Bank of England should stop selling gilts from its quantitative-easing portfolio because the sales are distorting monetary policy, a former BOE rate-setter warned.

Sushil Wadhwani, who was a member of the nine-strong Monetary Policy Committee between 1999 and 2002, said active gilt sales are causing a “transmission problem.” While the bank has been cutting short-term interest rates, long-term borrowing costs have been rising in a sign that policy “is not transmitting along the yield curve in the way we normally expect.”