View more on these topics

MPs raise concerns about unwinding QE

Members of the Treasury select committee have warned not enough is being done to prepare for the unwinding of quantitative easing.

The Bank of England has bought £325bn worth of Government bonds from the secondary market over the past three years.

Yesterday, during a TSC sub-committee hearing with the Debt Management Office which sells gilts for the Government, committee member and Conservative MP Andrea Leadsom warned the Bank’s plan to raise rates and sell off a third of its portfolio would affect the yield curve of Government bonds.

DMO chief executive Robert Stheeman said he had not spoken “in any great detail” with the monetary policy committee about how QE would be unwound as it is a decision for the committee. He added he had raised the issue with the Treasury in the past but had not done so recently because the need to unwind QE is a long way off.

TSC chairman Andrew Tyrie said: “We need to start thinking about this because it is a huge sum of money.”

Leadsom called on the DMO to raise the matter with the MPC because it will effect the work of the DMO. “You should think about the exit before you walk down a bind alley. All we are doing is more QE and still it appears no-one has actually considered the mechanism by which you get out,” she said

Stheeman said it was for the Bank to approach the DMO and his office was ready to talk when this happens.

He said the DMO would like to see the gilts held by the Bank sold off in a “predictable and programmatic” way, adding the Bank’s executive director for markets Paul Fisher has said the same thing.



Pension transfer retreat cuts member benefit by £5bn

The FSA says its decision to scrap plans to force advisers to compare all defined-benefit pension transfers using an RPI-linked annuity rate will lower the estimated benefit of the reforms to members by £5bn. The regulator today confirmed changes to the way pension transfers are calculated in a bid to make it more difficult for […]

Master of Disaster

Leonard Charlton, manager of the Melchior Selected Trust European absolute return fund, has a reputation for identifying companies whose share prices are likely to fall. He has proved so adept at this during his career that colleagues have dubbed him the Master of Disaster. Despite being an unlikely moniker for a highly successful fund manager, […]


HSBC axes tied advice service- 650 jobs to go

HSBC is to axe its tied advice service in a move that will see up to 650 of its advisers losing their jobs. The bank is going to keep its whole-of-market advice service and its execution-only service. A HSBC spokesman says around 50 of the tied advisers will be given the opportunity to switch to […]

First class

Reaction to an ATM scam offers a lesson for protection firms

Dividend slump? Not if you look globally

By George Boyd-Bowman, Manager of the Neptune Global Income Fund Recent research has indicated that global dividend growth will slump by as much as 50 per cent in 2016. As collapsing commodities hit high-profile dividend payers, George Boyd-Bowman explains why the US and Japan are his top picks for income growth in 2016. Click here […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment