Best Fund Managers call for the English Bank to stop selling gilded persons to stony debt markets

Author Naomi Rovnick

London (Reuters) -ASSET executives, which are overseen by companies for over $ 1.5 trillion, call for the Bank of England to eliminate the sale of bonds, they believe that the British Government debt is unnecessary, while they also accumulate tens of billion taxpayers.

Reuters talked to 10 investors who wanted the central bank to stop sales until September 18th. He pledged to slow down a joint leak, including mature bonds. They do not think that BOE has gone far enough and recommend changing politics, including a complete suspension of sales.

Because November The annual budget of the Finance Minister Rachel Reeves is in November, with the long -term borrowing costs of Britain the highest among the G7 advanced economy. Lipting inflation and fiscal concerns depressing the value of bonds called Gilts, while BOE also actively sells its shares in weak UK debt markets, registers losses.

Gilded market instability

The Treasury compensates the central bank for the bond market losses. Although taxpayers have used bond profits in the past, the agreement now costs the government £ 22 billion ($ 29.6 billion) annually, according to research on former Boe economist Carsten Jung.

“Many investors, including yourself, said to the Bank of England, you are doing the problem even worse, not better. Stop doing it,” said RBC BlueBay Asset Management fixed income cio Mark Dowding, which directly maintains about $ 154 billion. He said he had no gilded and betting on a pound by weakening the euro.

Dowding shared his opinion with BOE officials before the central bank announced that it would reduce the grained leakage to £ 70 billion (£ 94 billion) from $ 100 billion a year. He still hopes for the instability of the gilded market and has since offered to stop issuing long -dated bonds to the UK Debt Service to raise funds.

BOE refused to comment until the Treasury representative refused to comment on whether the government would consider amendments to reduce public finances.

Boe increased the government bonds worth £ 875 billion from 2009 to 2021 to support the UK economy and then moved them to move them faster than other central banks. This so -called quantitative collapse after central banks have been facilitated after the global financial crisis and pandemic.

“Fiscal feedback loop”

2024. The Treasury Committee report called “QT PLAN” a “jump in the dark” with more public money than ever intended. One 40 years gilded in 2020. Released now sells 24% of its initial release price, taking into account the potential Boe loss losses.

BOE said that since 2012 For taxpayers, the benefits of pure cash flows are still 34 billion pounds, the funds used by the government to release pressure to increase growth to increasingly frustrated voters.

And while losses increase one measure of British debt, gilded sales improve the current budget deficit measure subject to Reeves. This is because they reduce bank reserves in BOE balance she pays interest.

Dynamic Real, a Dynamic Real Real Return to a multifaceted aspect and a neutral location, shows that the additional debt interest costs from active quantitative tightening have been ranging from 1 to 3 billion pounds each year.

He “continues to push the topic” in upcoming meetings with BOE because the announced reduction is too small to influence the wavy gilded rhinths, he said.

Central banks moving Lockstep to stop quantitative relief from 2021 increased debt yields worldwide, but the UK has increased impact and the National Bureau of Economic Research has been announced in 2024. The study was evaluated, while BOE’s active sales increase increased to 70 base points (BPS). One base point is one hundred percent points or 0.01%.

The US Federal Reserve Bank and the European Central Bank have allowed debts to publish their books as the bonds mature because of the increased yields of approximately 20 base points, according to the Nber document.

BOE August Stated that the sale of its debts increased from 15 to 25 bps to gilded yields.

Paul Flood, BYNES INVESTMENTS Newton, mixed assets manager, the active UK QT affected the Sustainability of the UK’s debt through the “fiscal feedback loop” with higher public sector costs and greater gilded yields.

“I think it’s madness,” said Stephen Snowden, the head of the fixed income of Artemis. “Active quantitative tightening should be completely suspended. For the taxpayer, this is a destructive.”

($ 1 = £ 0.7429)

(Naomi Rovnick messages; additional reports by David Miliken, Nell Mackenzie and Youc Bahceli; Edited by Dhara Raninghe, Elisa Martinuzzi and Aurora Ellis)

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