BoE Gold Vaults Hold £200 Billion Amid Public Debt Debate

The Bank of England's gold vaults hold around 400,000 bars valued at over £200 billion, making it the second-largest keeper of gold in the world behind the New York Federal Reserve.

According to a new book by two serving BoE economists, Jack Leslie and Rupal Patel, only about 6% of the gold is held on behalf of the UK Treasury; the majority is stored for other central banks and similar institutions.

The vaults are precise in their logistics: bars are stacked four high on steel and wood pallets, with each pallet carrying approximately 80 bars or roughly one tonne of metal. This system was adopted to allow efficient processing of incoming and outgoing bars.

Leslie and Patel also discussed the Bank's role in payment infrastructure and the current debate over public debt. They explained that rate rises are a 'blunt tool' for managing inflation, effective at dampening demand but less so against supply-side shocks.

Patel rejected money-printing as a solution to public debt, citing Zimbabwe and Germany as historical illustrations of hyperinflation. The next MPC meeting will test whether the three dissenters who wanted a rate rise can build a majority.