BoE's Gilt Sales Crisis: UK Faces Highest G7 Borrowing Costs
Top fund managers demand Bank of England halt its gilt sales programme as UK faces highest borrowing costs in G7, costing taxpayers £22 billion annually amid mounting market pressure.
Bank of England headquarters as gilt market crisis deepens amid rising borrowing costs
British Taxpayers Bear Burden as Bond Market Turmoil Deepens
Leading fund managers overseeing more than £6.3 trillion in assets are calling for an immediate halt to the Bank of England's controversial gilt sales programme, as Britain grapples with the highest long-term borrowing costs among G7 nations. This financial strain echoes broader challenges facing the UK's economic governance, similar to recent contentious policy decisions affecting public finances.
Mounting Pressure on Public Finances
The Treasury's arrangement to compensate the Bank of England for bond-market losses is currently costing British taxpayers a staggering £22 billion annually. This fiscal burden comes at a time when the government is already facing increased scrutiny over its public spending decisions and policy implementations.
"Many investors including ourselves have been saying to the Bank of England you're making the problem worse, not better. Stop doing this," warns RBC BlueBay Asset Management's Mark Dowding, who oversees approximately $154 billion in assets.
Critical Market Impact
The situation has become particularly concerning as:
- The BoE's active bond sales have pushed yields up by 70 basis points
- One 40-year gilt now trades at just 24% of its original issue price
- The UK faces significantly higher borrowing costs than other G7 nations
National Security and Economic Stability
This financial instability poses broader implications for national security and social cohesion, reminiscent of recent challenges faced in maintaining public safety and economic stability across various sectors.
Expert Recommendations
Leading financial experts are calling for:
- Complete suspension of active gilt sales
- Review of the BoE's quantitative tightening strategy
- Implementation of more sustainable debt management practices
As Rachel Reeves prepares her November budget, the pressure mounts to address these critical financial challenges that threaten Britain's economic sovereignty and stability.
Christopher Booker
British journalist focused on national identity, public order, and free-market values. Defends tradition in a fast-changing world.