Taxpayers could be spared up to ￡5bn next year if the Bank of England changes course on its controve (Image: Getty)

       Taxpayers could be spared up to ￡5bn next year if the Bank of England changes course on its controversial bond sale programme , experts have said.

       Analysts at Deutsche Bank have urged the Bank, led by Governor Andrew Bailey, to stop selling long-term debt amid a dramatic fall in bond prices, which could save new Chancellor Rachel Reeves from handing over billions to cover losses.

       Article continues below ADVERTISEMENT

       15 Worst Breakfast FoodsNumber 15 will shock you!Health Natural | Sponsored Sponsored

       Click Here

       Undo

       DON'T MISS

       Powered by

       Rachel Reeves summer meltdown as tax hikes, strikes and soaring debt push Britain to brink

       416 Comments

       Premium bonds giant NS&I makes major change for savers with ￡500 minimum

       Comments

       Russia economic meltdown as steel giant profits plunge 89% & airlines face total collapse

       32 Comments

       Martin Lewis shares key way to 'maximise' savings account earnings

       Comments

       Building society launches new savings account paying ‘appealing' 6% interest rate

       2 Comments

       Lloyds boss sends huge 6 word alert over Rachel Reeves's potential tax hikes

       4 Comments

       Rachel Reeves savaged by Reform as Chancellor warned a 'crisis' is incoming

       43 Comments

       NS&I Premium Bonds warning over major change for all savers

       8 Comments

       NS&I savers issued alert over new savings account - 'safety comes at cost'

       1 Comments

       Huge blow for Rachel Reeves as 1 thing makes tax hikes ‘inevitable'

       42 Comments

       Britain and India to sign ￡4.8billion trade deal in massive Brexit boost

       210 Comments

       Rachel Reeves has nowhere left to turn as tax hikes now cost more money than they raise

       163 Comments

       Warning to anyone with a mortgage after inflation hits 3.6%

       2 Comments

       Building society launches new savings account with ‘highly competitive' 4.8% interest rate

       Comments

       5 Books Warren Buffett Wants You To Read in 2025Blinkist: Warren Buffett's Reading List | Sponsored Sponsored

       Undo

       Bank of England set to cut interest rates - new forecast of savings

       Comments

       Misery for Rachel Reeves as pound slumps after 'disappointingly small' retail sales rise

       3 Comments

       Surprising Proper Uses for Familiar Best-Sellersxkouw.com | Sponsored Sponsored

       Undo

       Turkey makes major change that's great news for British tourists

       Comments

       Russia economy meltdown as desperate banks set for 'bailouts' with consumer debt soaring

       5 Comments

       Anne Hegerty Steps Out With Her New Partner, And Fans Are StunnedGood Hype | Sponsored Sponsored

       Undo

       Brits heading on holiday urged to 'buy Euros now'

       9 Comments

       Rachel Reeves dealt massive new blow as she creates her own ￡20.7bn blackhole

       101 Comments

       Ultimate Guide: 10 DIY Pedicures for Beautiful Feet arizonanewyork.com | Sponsored Sponsored

       Undo

       Rachel Reeves summer meltdown as tax hikes, strikes and soaring debt push Britain to brink

       416 Comments

       Premium bonds giant NS&I makes major change for savers with ￡500 minimum

       Comments

       War Thunder - Register now for free and play against over 75 Million real PlayersWar Thunder | Sponsored Sponsored

       Play Now

       Undo

       Russia economic meltdown as steel giant profits plunge 89% & airlines face total collapse

       32 Comments

       Martin Lewis shares key way to 'maximise' savings account earnings

       Comments

       Is your GenAI adoption outpacing your ability to secure it?CIO | Fujitsu | Sponsored Sponsored

       Undo

       Building society launches new savings account paying ‘appealing' 6% interest rate

       2 Comments

       Lloyds boss sends huge 6 word alert over Rachel Reeves's potential tax hikes

       4 Comments

       Lucas Herbert Eagles 18th Hole AgainGolf Asia | Sponsored Sponsored

       Read More

       Undo

       Rachel Reeves savaged by Reform as Chancellor warned a 'crisis' is incoming

       43 Comments

       NS&I Premium Bonds warning over major change for all savers

       8 Comments

       Dating for Senior SinglesJapansdates | Sponsored Sponsored

       Read More

       Undo

       NS&I savers issued alert over new savings account - 'safety comes at cost'

       1 Comments

       Huge blow for Rachel Reeves as 1 thing makes tax hikes ‘inevitable'

       42 Comments

       Can't find Nutri-Grade A and B drinks?Health Promotion Board | Sponsored Sponsored

       Learn More

       Undo

       Britain and India to sign ￡4.8billion trade deal in massive Brexit boost

       210 Comments

       Rachel Reeves has nowhere left to turn as tax hikes now cost more money than they raise

       163 Comments

       One of the world’s top 5 refinery export hubsJTC | Sponsored Sponsored

       Learn More

       Undo

       Warning to anyone with a mortgage after inflation hits 3.6%

       2 Comments

       Building society launches new savings account with ‘highly competitive' 4.8% interest rate

       Comments

       Bank of England set to cut interest rates - new forecast of savings

       Comments

       Misery for Rachel Reeves as pound slumps after 'disappointingly small' retail sales rise

       3 Comments

       Turkey makes major change that's great news for British tourists

       Comments

       Russia economy meltdown as desperate banks set for 'bailouts' with consumer debt soaring

       5 Comments

       Brits heading on holiday urged to 'buy Euros now'

       9 Comments

       Rachel Reeves dealt massive new blow as she creates her own ￡20.7bn blackhole

       101 Comments

       Rachel Reeves summer meltdown as tax hikes, strikes and soaring debt push Britain to brink

       416 Comments

       Premium bonds giant NS&I makes major change for savers with ￡500 minimum

       Comments

       Russia economic meltdown as steel giant profits plunge 89% & airlines face total collapse

       32 Comments

       Martin Lewis shares key way to 'maximise' savings account earnings

       Comments

       Building society launches new savings account paying ‘appealing' 6% interest rate

       2 Comments

       Lloyds boss sends huge 6 word alert over Rachel Reeves's potential tax hikes

       4 Comments

       Rachel Reeves savaged by Reform as Chancellor warned a 'crisis' is incoming

       43 Comments

       The Bank is currently unwinding its massive stockpile of gilts, built up over the past decade during the financial crisis and lockdowns, when it created nearly ￡900bn to support the economy.

       At the time, interest rates were as low as 0.1pc, meaning the Bank earned more on government bonds than it paid in interest to commercial banks. But this has flipped since rates began to rise sharply, turning gains into losses.

       As part of so-called quantitative tightening (QT), the Bank has started actively selling gilts back into the market. These sales have crystallised heavy losses, placing a further burden on Britain’s already strained public finances.

       Sponsored

       TheDecorIdeas | Sponsored Sponsored

       Husband designed this tiny cabin, wife laughed then fell silent wait till you see？

       Undo

       Read more: Rachel Reeves meltdown as UK borrowing costs hit highest since financial crisis

       Read more: Annuity rates soar by 7% as pensioners urged to shop around after bond turmoil

       The drop in long-dated bond prices, caused by global investor jitters over economic uncertainty, has only intensified calls for the Bank to change tack ahead of a key September decision.

       Sanjay Raja, Deutsche Bank’s chief economist, warned that if the Bank keeps selling all types of gilts equally – including long-dated ones – the Treasury could face a ￡24bn bill in the next year.

       However, if sales are limited to short and medium-term gilts, that bill could fall to ￡18.9bn. And if the Bank scales back overall sales from ￡100bn to ￡75bn a year – as many in the markets expect – the cost could drop further to ￡15.6bn.

       The Reform Party has gone further, calling for an immediate halt to all active bond sales.

       The Treasury has already sent nearly ￡90bn to the Bank to plug the hole left by QT, including ￡53bn in interest payments to commercial lenders and ￡37bn in losses from bond sales.

       Bank of England retains interest rates at 4.25%

       0 seconds of 1 minute, 55 seconds Volume 0%

       Press shift question mark to access a list of keyboard shortcuts Keyboard Shortcuts EnabledDisabled

       Shortcuts Open/Close / or ?

       Play/Pause SPACE

       Increase Volume ↑

       Decrease Volume ↓

       Seek Forward →

       Seek Backward ←

       Captions On/Off c

       Fullscreen/Exit Fullscreen f

       Mute/Unmute m

       Decrease Caption Size -

       Increase Caption Size + or =

       Seek % 0-9

       Next Up

       GB News: Camilla Tominey quizzes Labour MP James Murray

       00:59

       x facebook Email Link https://cdn.jwplayer.com/previews/r1TixZzb Copied

       Auto360p 1080p 720p 540p 360p 270p 180p

       Live

       00:34

       01:21

       01:55

       More Videos

       00:59

       GB News: Camilla Tominey quizzes Labour MP James Murray

       00:45

       Furious Bob Geldof speaks about starvation in Gaza

       00:53

       GB News star erupts in fiery small boat migrant clash

       01:38

       Trump holds bilateral meeting with Ursula von der Leyen

       00:38

       GB News: Ben Leo attends the Trump protest in Edinburgh

       00:58

       GB News panelist shares frustration over migrant spending

       Close

       Of that, around ￡20bn has come from selling longer-term debt, while losses from short-term sales amount to just ￡5bn, according to Deutsche Bank.

       Mr Raja said: “From a borrowing perspective, less QT means less borrowing and less issuance. Moving from a ￡100bn envelope to ￡75bn would result in some meaningful savings on the borrowing side.

       “Skewing sales away from longs to shorts/mediums evenly would also result in some modest savings. For a ￡100bn QT envelope, we estimate savings to be a non-negligible ￡5bn. No active sales would mean substantial savings, but only in the near-term.”

       DON'T MISS

       Powered by

       Rachel Reeves summer meltdown as tax hikes, strikes and soaring debt push Britain to brink

       416 Comments

       Premium bonds giant NS&I makes major change for savers with ￡500 minimum

       Comments

       Russia economic meltdown as steel giant profits plunge 89% & airlines face total collapse

       32 Comments

       Martin Lewis shares key way to 'maximise' savings account earnings

       Comments

       Building society launches new savings account paying ‘appealing' 6% interest rate

       2 Comments

       Lloyds boss sends huge 6 word alert over Rachel Reeves's potential tax hikes

       4 Comments

       Rachel Reeves savaged by Reform as Chancellor warned a 'crisis' is incoming

       43 Comments

       NS&I Premium Bonds warning over major change for all savers

       8 Comments

       NS&I savers issued alert over new savings account - 'safety comes at cost'

       1 Comments

       Huge blow for Rachel Reeves as 1 thing makes tax hikes ‘inevitable'

       42 Comments

       Britain and India to sign ￡4.8billion trade deal in massive Brexit boost

       210 Comments

       Rachel Reeves has nowhere left to turn as tax hikes now cost more money than they raise

       163 Comments

       Warning to anyone with a mortgage after inflation hits 3.6%

       2 Comments

       Building society launches new savings account with ‘highly competitive' 4.8% interest rate

       Comments

       Meghan and Harry's New House: Unexpected Inside Details (See Pics)BuzzSuper | Sponsored Sponsored

       Undo

       Bank of England set to cut interest rates - new forecast of savings

       Comments

       Misery for Rachel Reeves as pound slumps after 'disappointingly small' retail sales rise

       3 Comments

       Play this game for 1 minute and see why everyone is crazy about itplanetcapture.io | Sponsored Sponsored

       Undo

       Turkey makes major change that's great news for British tourists

       Comments

       Russia economy meltdown as desperate banks set for 'bailouts' with consumer debt soaring

       5 Comments

       No more thinning hair! This bestseller at Watsons works even in 40s-60sHair’s Rich | Sponsored Sponsored

       Learn More

       Undo

       Brits heading on holiday urged to 'buy Euros now'

       9 Comments

       Rachel Reeves dealt massive new blow as she creates her own ￡20.7bn blackhole

       101 Comments

       Breakfast: 15 Foods Never To Eat In The MorningHealth Natural | Sponsored Sponsored

       Click Here

       Undo

       Rachel Reeves summer meltdown as tax hikes, strikes and soaring debt push Britain to brink

       416 Comments

       Premium bonds giant NS&I makes major change for savers with ￡500 minimum

       Comments

       严孟达：20年前那一场豪赌Lianhe Zaobao | Sponsored Sponsored

       Undo

       Russia economic meltdown as steel giant profits plunge 89% & airlines face total collapse

       32 Comments

       Martin Lewis shares key way to 'maximise' savings account earnings

       Comments

       Looking 10 years older from thinning hair! This Watsons find works wonders!Hair’s Rich | Sponsored Sponsored

       Learn More

       Undo

       Building society launches new savings account paying ‘appealing' 6% interest rate

       2 Comments

       Lloyds boss sends huge 6 word alert over Rachel Reeves's potential tax hikes

       4 Comments

       Play War Thunder now for freeWar Thunder | Sponsored Sponsored

       Play Now

       Undo

       Rachel Reeves savaged by Reform as Chancellor warned a 'crisis' is incoming

       43 Comments

       NS&I Premium Bonds warning over major change for all savers

       8 Comments

       Katie Price, 46, Takes Off Makeup, Leaves Us With No WordsDirect Sharing | Sponsored Sponsored

       Read More

       Undo

       NS&I savers issued alert over new savings account - 'safety comes at cost'

       1 Comments

       Huge blow for Rachel Reeves as 1 thing makes tax hikes ‘inevitable'

       42 Comments

       Paul Gascoigne's Actual House Left Us With No Words - Take A LookOne Daily | Sponsored Sponsored

       Undo

       Britain and India to sign ￡4.8billion trade deal in massive Brexit boost

       210 Comments

       Rachel Reeves has nowhere left to turn as tax hikes now cost more money than they raise

       163 Comments

       American Investor Warren Buffett Recommends: 5 Books For Turning Your Life AroundBlinkist: Warren Buffett's Reading List | Sponsored Sponsored

       Undo

       Warning to anyone with a mortgage after inflation hits 3.6%

       2 Comments

       Building society launches new savings account with ‘highly competitive' 4.8% interest rate

       Comments

       Bank of England set to cut interest rates - new forecast of savings

       Comments

       Misery for Rachel Reeves as pound slumps after 'disappointingly small' retail sales rise

       3 Comments

       Turkey makes major change that's great news for British tourists

       Comments

       Russia economy meltdown as desperate banks set for 'bailouts' with consumer debt soaring

       5 Comments

       Brits heading on holiday urged to 'buy Euros now'

       9 Comments

       Rachel Reeves dealt massive new blow as she creates her own ￡20.7bn blackhole

       101 Comments

       Rachel Reeves summer meltdown as tax hikes, strikes and soaring debt push Britain to brink

       416 Comments

       Premium bonds giant NS&I makes major change for savers with ￡500 minimum

       Comments

       Russia economic meltdown as steel giant profits plunge 89% & airlines face total collapse

       32 Comments

       Martin Lewis shares key way to 'maximise' savings account earnings

       Comments

       Building society launches new savings account paying ‘appealing' 6% interest rate

       2 Comments

       Lloyds boss sends huge 6 word alert over Rachel Reeves's potential tax hikes

       4 Comments

       Rachel Reeves savaged by Reform as Chancellor warned a 'crisis' is incoming

       43 Comments

       Singapore: Meal Delivery for Seniors - Prices May Surprise YouMeal Delivery | Search Ads

       Undo

       by Taboola by Taboola

       Sponsored Links Sponsored Links

       Promoted Links Promoted Links

       Play this game for 1 minute and see why everyone is addicted.Panzer.Quest

       Undo

       by Taboola by Taboola

       Sponsored Links Sponsored Links

       Promoted Links Promoted Links

       Do you have a mouse?Desert Order

       Undo

       by Taboola by Taboola

       Sponsored Links Sponsored Links

       Promoted Links Promoted Links

       Play this game for 3 minutes, if you own a mouseplanetcapture.io

       Undo

       by Taboola by Taboola

       Sponsored Links Sponsored Links

       Promoted Links Promoted Links

       Pressure is mounting on Mr Bailey to reconsider the policy as losses grow. He has acknowledged that the “global steepening of bond curves” would “play into” the Bank’s decision on how to proceed.

       Reform deputy leader Richard Tice urged the Bank to act now, saying: “They shouldn’t be selling anything at all. Zero.

       “We now know that it’s driven up gilt yields, and the perception is it’s going to carry on keeping yields higher than otherwise should be. So what the Bank should be doing immediately is cancelling all further QT.”

       Read Next

       SUBSCRIBE Invalid email

       We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. Read our Privacy Policy