There's something not right in all this. This is a post I made on this thread at the start of October last year. What I say here is more or less what was on the front page of the Financial Times yesterday, this is obvious stuff anyone could've seen coming a year ago. So why did Sunak purposely create a situation whereby banks will get unknown billions shoveled at them, it could end up in the 100s of billions?
_Os_ wrote: Thu Oct 07, 2021 3:51 pm Any target to return a budget surplus through cuts was abandoned by Osborne as long ago as 2016, but without any credible plan to achieve growth and eliminate the deficit that way. Much of the UK's debt is held by the Bank of England (BoE purchases gilts from banks in return for interest-bearing reserves, about a third of UK government debt now takes this form, this makes servicing the debt much cheaper as long as the Bank Rate is at the historically low 0.1%), but if the Bank Rate increases servicing that debt will rise too and further expand the deficit. Independent monetary institutions don't last long in a full on banana republic for reasons like this; if there's no GDP growth the UK government will end up having a more or less existential political stake in the Bank Rate. A good trick will be having tiered rates to pump the debt even higher (probably all sorts of downsides in that, but if you're shameless it doesn't matter and is a good enough quick fix).