UK is Fucked
Out of context: Reply #1197
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- shapesalad0
https://www.reuters.com/world/uk…
Britain's government could end up paying 133 billion pounds ($157 billion) to the Bank of England over six years to finance its quantitative easing (QE) programme, official budget forecasters said on Thursday.
British banks hold around 950 billion pounds of reserves at the BoE, largely as a result of more than 800 billion pounds of reserves created to pay for QE purchases of British government bonds that the central bank is yet to reverse.
Banks are paid interest on the reserves at whatever is the BoE's current interest rate - just 0.1% a year ago, but 3% now and they could rise further still.
Until recently, the government received profits made by the BoE's QE programme when interest rates were low, which totalled 120 billion pounds between March 2009 and March 2022.
Those flows have reversed: now the government foots the bill for any losses the BoE makes as it pays higher interest on bank reserves issued for its QE programme than it receives from the government bonds which the BoE bought.
- Seems... worse than the FTX saga.shapesalad
- https://www.theguard…Bluejam