The
Bank
of
England
took
a
“leap
in
the
dark”
when
it
started
to
sell
off
government
debt
in
2022
and
was
not
paying
any
attention
to
value
for
taxpayers’
money,
MPs
on
the
Treasury
Select
Committee
(TSC)
have
warned.
In
a
statement,
the
TSC
said
said
the
Bank
had
been
the
first
major
central
bank
in
the
world
to
embark
on
quantitative
tightening
(QT),
which
involves
selling
off
government
debt
in
order
to
remove
money
from
the
economy.
But
while
it
was
important
for
the
Bank’s
decision
makers
to
focus
on
setting
borrowing
costs,
it
urged
officials
to
also
explore
ensuring
the
pace
of
so-called
QT
would
be
at
least
partly
based
on
value
for
money
(VFM)
for
the
taxpayer.
“While
recognising
that
QT
is
not
considered
an
active
monetary
policy
tool
by
the
bank,
the
Committee
determines
decisions
are
being
taken
regarding
vast
amounts
of
taxpayers’
money
without
any
regard
to
value
for
money,”
the
Committee
said
in
a
report.
Treasury
Committee
Chair
Harriett
Baldwin
(pictured
above)
added:
“it
has
become
clear
during
the
course
of
this
inquiry
that
the
decision
to
undertake
a
period
of
QT
is
a
leap
in
the
dark
for
the
UK
economy.
“I
recognise
the
Bank
of
England
does
not
have
a
crystal
ball
and
is
in
uncharted
waters,
but
more
can
be
done
to
develop
forecasting
and
modelling
tools
that
can
help
us
understand
the
risks
and
benefits
of
QT.
“With
more
public
money
at
stake
than
was
ever
envisaged
when
[quantitative
easing]
was
launched,
the
Bank
and
Treasury
should
take
our
advice
and
explore
whether
the
usual
value
for
money
considerations
can
be
factored
in
when
deciding
the
pace
and
level
of
QT
they
implement.”
The
Bank
said
it
would
consider
the
committee’s
findings
before
responding.
The
debt
sold
off
in
recent
years
by
the
Bank
is
the
same
it
started
buying
during
the
2008
financial
crisis –
when
it
wanted
to
add
new
money
to
the
UK’s
struggling
economy.
Responding,
the
Bank
said:
“we
welcome
the
Committee’s
report
and
will
consider
its
findings
carefully
before
responding.
We
continue
to
encourage
active
debate
about
our
monetary
policy
decisions
and
their
implementation”.
Via
AP
News
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