Reform UK leader Nigel Farage has intensified pressure on the Bank of England, calling for an immediate halt to government bond sales and a reduction in the interest paid to UK banks. His comments followed a meeting with Bank of England governor Andrew Bailey at Threadneedle Street headquarters, where Reform MP Richard Tice also participated.
Farage and Tice argue that political leaders should take greater control over the Bank’s operations, which were made independent under Gordon Brown in 1997. They claim that a change in direction from parliament, via the chancellor, could ease pressure on taxpayers and reduce the need for future tax increases.
Tice confirmed after the meeting that he will write to the chancellor and the leader of the House of Commons requesting an urgent debate once parliament returns.
Critics Warn of Risks to Bank of England Independence
The shadow chancellor, Mel Stride, criticised the Reform UK position, warning that “politicising interest rates” could destabilise markets and drive inflation higher. He emphasised that Bank of England independence was created precisely to prevent political interference in monetary policy.
Currently, the Bank pays interest on the large reserves built up during its quantitative easing (QE) programme and is selling off bonds under its quantitative tightening (QT) plan. However, Reform UK has highlighted that bond sales are happening at a loss, which the Treasury must cover, adding further strain on public finances.
Bailey Rejects Reform’s Proposals
Andrew Bailey dismissed Reform UK’s arguments in a public letter earlier this year, insisting that removing interest payments on bank reserves would amount to a tax on banks — a decision that only an elected government could make.
The Bank recently announced it will sell around £21bn of government bonds in the coming year, with £49bn of bonds set to mature, marking a slower pace of QT amid volatile global markets.
Wider Debate Over Bank Profits and Treasury Losses
Beyond Reform UK, several left-leaning think tanks, including the Institute for Public Policy Research (IPPR), have urged the government to impose a windfall tax on banks that have benefited from rising interest rates. The IPPR estimates QT is currently costing the Treasury around £22bn annually.
A Bank spokesperson described the meeting with Reform UK as “productive” and part of its ongoing engagement with political representatives.
