BoE Bond-Selling Programme Under Fire Over Borrowing Costs

The Bank of England is facing criticism over its approach to unwinding quantitative easing. Economists are urging the bank to halt its bond-selling programme, arguing that it's driving up government borrowing costs and costing taxpayers billions.

A group of bond investors and analysts warn that the bank's active quantitative tightening policy is adding pressure to already high gilt yields. The 30-year gilt yield has climbed to around 5.8%, its highest level since 1998, while the 10-year yield remains close to the post-financial crisis high of 5.1%.

The Bank of England's active quantitative tightening policy involves actively selling bonds rather than simply letting them mature. This approach is different from other central banks, which have opted to run down their balance sheets passively. The bank has defended its approach, citing the government's historical issuance of long-dated debt, but critics argue that continuing this policy will only add to the Treasury's burden.