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Simon HB
@norock.bsky.social
I'm gonna try hard this time not to touch the ground
387 followers628 following4.3k posts
SHnorock.bsky.social

I'm not sure how solid the economic merit of Reform's plans to stop paying interest on QE here, but since quantative easing was not like a bloke in the street printing a twenty quid note on his Epson inkjet, I'm not expecting to discover it is that well-founded

The cost of this measure is estimated at £40bn pa (depending on employment numbers) which will be mainly funded by ending the Bank of England’s current voluntary payment of base rate interest on the printed money reserves, known as quantitative easing (QE) reserves. This transfers some £30-40bn per year of interest payments (at current interest rates) to big banks from taxpayers and is neither necessary nor contractual. Other central banks are not paying this, nor should the Bank of England. To understand this concept, imagine printing a £20 note on your home printer and giving it to your neighbour who is having a tough time. Having done him a major favour, why would you pay him interest every year on the money you gave him? This is what QE did: saved the nation from going bust in 2008 and 2020 – so the Bank of England should not pay ongoing interest on the money reserves that it printed.
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SH
Simon HB
@norock.bsky.social
I'm gonna try hard this time not to touch the ground
387 followers628 following4.3k posts
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