Treasury Faces Pressure to Absorb Bank of England Losses

The UK Treasury is facing pressure to absorb losses incurred by the Bank of England due to its investments in various assets. According to the Financial Times, the Bank's portfolio includes a significant allocation to foreign exchange and interest rate derivatives, which have not performed well in recent times.

In an attempt to limit potential losses, the Treasury has been considering measures to reduce the Bank's exposure to these assets. However, experts warn that such steps may have unintended consequences on the UK economy.

The Financial Times quotes a source close to the matter as saying, 'The Treasury is trying to distance itself from the Bank's losses.' However, this approach has been criticized by some who argue that it would be unfair to burden taxpayers with the costs of the Bank's investments.