Which is more irresponsible – overspending billions of public pounds or ‘financial repression’?
Rishi Sunak: I like this shot because he looks nervous. If I was in his position, asking Tory backbenchers to raise taxes, I’d be nervous too.
Rishi Sunak has been accused of wasting billions of pounds of public money – your money – because he failed to insure against interest rate rises on government debt.
It means higher than necessary payments on £900bn of reserves created through the quantitative easing (QE) programme, according to the National Institute of Economic and Social Research.
The loss over the past year is around £11 billion, the think tank estimates.
The Treasury has retaliated by saying NIESR’s proposal would undermine the independence of the Bank of England and be “hugely damaging” to the credibility of how public finances are managed.
Not only that, but there is an argument that, even if the Treasury had been able to predict the rate rise (which is possible), it would have been a potentially expensive bet – taking chances with the system.
Really?
Read the arguments here – if you can make sense of them.
The question for us as laypeople is, what do we think is more irresponsible – damaging the credibility of the public finances by pressuring the Bank of England to take a particular action, or damaging the credibility of the public finances by wasting £11 billion?
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