BOE Gilt Sales Are a Multibillion-Pound Mistake

The Bank of England cherishes its independence as a central bank free to decide monetary policy. But it's also an arm of the state with a duty of care to taxpayers. Its recent approach to reducing its vast pile of bond holdings — at the same time as it aggressively raises interest rates — borders on dereliction. Massive losses are being taken on the sales,but the BOE is determined to stay the course.

In fact, Deputy Governor for Markets Dave Ramsden signaled in a July 19 speech that the Monetary Policy committee will decide at its September meeting to dramatically accelerate the sales. What disturbs me is the emphasis that "importantly, the MPC does not take into account financial risk or profit when taking monetary policy decisions, including the gilt portfolio.” Shouldn’t they care about the taxpayer — a little?