November 9, 2012
The Treasury will receive a £35billion windfall from the Bank of England, it was announced today, in an unexpected boon to the Chancellor’s budgetary headache.
Governor Mervyn King has agreed that the Bank will hand over interest it has earned its holding of £375billion in Government debt purchased under the quantitative easing programme.
The extra cash will constitute a bonus reduction to the budget deficit, while also acting as a ‘small loosening of monetary conditions’ equivalent to more QE, according to the Bank.
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