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The chief of the Bank of England has defended its government bond-selling programme amid criticism that it is costly to taxpayers, including from Reform UK leader Nigel Farage. Andrew Bailey said the process of offloading debt was giving the Bank capacity to defend against future economic shocks. Writing in The Times newspaper, the governor said: ‘Quantitative easing [QE] did its job. It protected jobs, boosted spending and supported the economy at the times of crisis. Indeed, many of those who now criticise QE were not saying as much at the time. ‘Now, we are reducing our gilt holdings to give us the capacity to intervene again in future if needed. We do this through a combination of gilts maturing at the end of their term of issue, and selling bonds.’ The Bank of England bought hundreds of billions of pounds’ worth of bonds following the 2008 financial crisis in a bid to boost the economy. Three years ago, it started to sell off those bonds, which are costly to hold, through a process known as quantitative tightening [QT]. The pace of QT has been to a target of £100 billion a year for the past few years, and it is now targeting about £70 billion a year. The Bank is selling those bonds back to investors for less than it paid for them, and the Treasury covers the losses from trading at lower prices. Farage’s Reform UK party has previously criticised the process, arguing that it causes significant losses for the taxpayer. The party has pledged to save ‘tens of billions’ of pounds by stopping interest payments on central bank deposits and halting QT. Bailey said the government has sent around £108 billion to the Bank since late 2022, but that it received early £124 billion in previous years when the central bank was profiting from the programme. Overall, recent reports indicate that ‘the overall cost of the Bank’s QE and QT operations is broadly neutral’, the governor said. ‘It is argued that slowing or stopping QT sales will shield against losses,’ he added. ‘This is a misconception. Arguments that the UK is out of line with other countries are wide of the mark.’ By Anna Wise, Press Association Business Reporter Press Association: Finance source: PA Copyright 2026 Alliance News Ltd. All Rights Reserved.
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