Treasury could make £8bn of public debt ‘disappear’

Treasury could make £8bn of public debt ‘disappear’

Published on 17/05/2012

The first£8billion of gilts – Government bonds – bought under the Bank of England’s QE scheme will be due for repayment from the start of next year.


But it has emerged that with £8B due for repayment next year, the Bank needs to decide whether to recycle the proceeds into fresh gilt purchases, or simply hand the money back to the Treasury.

Should it do the latter, it would suggest that the entire programme – equivalent to more than 20% of GDP – is being financed with money printed out of nowhere, with no prospect of the gilts in question ever being sold back to private investors, which is the official position.

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