Best Of

I have to apologise to Luckyguy.
While his suggestions regarding QE were economically eccentric, and essentially ignored the costs of what he was proposing, the recent sharp rise in interest rates has somewhat changed the situation. And while his remedy might well have been as bad as the problem he was seeking to address, he was quite right to identify a large problem which the rest of us really didn't.

In the environment, the BoE continuing its program of steadily unwinding QE (something which theEU and the US aren't doing) effectively means that it takes very large losses on its continuing gilt sales - which also help depress market prices, and create something of a downward spiral.
Also the banks are now making outsize profits (something never intended) by virtue of the scheme.

The IPPR has a report out which makes some much more sensible, and quite simple suggestions to address those two things.

You can download the full report here:

https://www.ippr.org/articles/fixing-the-leak
..after a period of making significant profits on this programme, the Bank of England is now making record losses, which is historically very unusual for central banks. The Treasury is paying for these losses, making the UK an international outlier, and the sums involved are staggering: Bank of England losses will cost the taxpayer £22 billion a year in every year of this parliament.
These losses come from two sources: valuation losses from selling government bonds below purchase value; and interest rate losses.
In this report we recommend a two-pronged approach to address this issue.
First, to recoup interest rate losses for the taxpayer currently occurring at the Bank of England, the government should implement a ‘QE reserves income levy’ on commercial banks.
Second, the government should urge the Bank of England to review and better manage the fiscal implications of its policies, in particular slowing the pace of the unwinding of quantitative easing – so-called quantitative tightening – and any future quantitative easing.

Seems like a no brainer for a Chancellor desperate for cash.
With very little downside.

On other local news:

The UK government did not do its own analysis of the cost of the biggest reorganisation of councils in England for decades, the BBC has learned.

Deputy Prime Minister Angela Rayner said "a significant amount of money" could be saved by merging councils in 21 areas into single authorities.

Rayner's department, the ministry of local government, based its cost estimates on a 2020 report commissioned by the County Council Network (CCN) that said £2.9bn could be saved over five years.

But the CCN has since revised its analysis and now says the reorganisation could make no savings and actually cost money in some scenarios.

https://www.bbc.co.uk/news/articles/cj9wxnlnrxdo

I wonder how much time Rayner spends doing her job compared to her own housing dealings:

Angela Rayner, the deputy prime minister, has been accused of avoiding £40,000 in stamp duty on her new flat by the sea after she told authorities it was her primary residence.

Rayner, who is also the secretary of state for housing, communities and local government, was said to have removed her name from the official deed to her house in Greater Manchester weeks before buying an £800,000 flat in Hove, East Sussex.

According to The Telegraph, Rayner would have had to pay £70,000 in stamp duty on a second property, so the change saved her £40,000. She is thought to have paid only £30,000.

She also told Tameside council in Greater Manchester that the house in her constituency was still her main home, before telling Brighton and Hove council that her new flat was her second home, which would change her status for council tax.

https://www.thetimes.com/uk/politics/article/angela-rayner-avoided-40000-stamp-duty-on-new-seaside-flat-76m7g6zkb

As we know Rayner has a long history of dubious housing transactions.

The CCN based their
projections on single unitary
authorities replacing county
council areas and the district
councils in those areas.

However it looks like up to
three unitary councils per
county council area and
district councils pushing for at least that

I prefer this to anything by Gerard Manley Hopkins.

I don’t understand your weird rules re stamp duty. It is reported that Angela Rayner has declared her new pad in Hove as her main residence in order to reduce the potential stamp duty amount.

How is it that the tax authorities do not reject this as they could make the argument that she owns a house in her constituency, where her job is tied to, represents as an MP and the other part of her job is covered by work provided accommodation and so there is no argument that can reasonably be used to say that the Hove apartment is her main home.

And if she argued that she will be spending most of her time in Hove then surely her constituents/employers should have a say if they are happy with that.

I’m guessing loads of MPs of all stripes do this.

Do HMRC not question this? Is it a rule that needs fixing? It might be that it’s a good thing as it greases the wheels of the market and economy but seems a bit odd that you can just change which is your main home and HMRC have to accept it when it’s very questionable.

I like to support journalism but this feels like a silly waste of money when locals will do it for free on social media

Like they did in Dundee...

And they are still doing it, and digging out the real story, right now. Go have a look

Can you summarise or provide links so I can understand what the “real story” is?

The "real story" is how a minor incident that would barely reach a local newspaper in decades past became a worldwide moral panic about asylum seekers attacking young Scottish girls (despite the fact no asylum seekers was involved, and the male involved was a Christian).

It has all the features of how international Social Media controlled by the algorithms of the Nerd Reich values clicks over truth, and why we need proper journalism.

Making submissions to the Court of Appeal on behalf of Yvette Cooper, the Home Secretary, lawyers said the “relevant public interests in play are not equal” and are “fundamentally different in nature”.

The Home Office and owners of the Bell Hotel in Essex are appealing against last week’s temporary injunction granted to Epping Forest district council, ordering its closure as asylum accommodation.

In documents submitted to the court, Home Office lawyers said: “Epping represents the public interest that subsists in planning control in its local area.

The [Home Secretary] is taken for these purposes as representing the public interest of the entirety of the United Kingdom and discharging obligations conferred on her alone by Parliament.

“Epping’s interest in enforcement of planning control is important and in the public interest.

“However, the [Home Secretary’s] statutory duty is a manifestation of the United Kingdom’s obligations under Article 3 ECHR [European Convention on Human Rights], which establishes non derogable fundamental human rights.”

They’re talking about local planning v national interest . Which is blatantly obvious for those that can read and don’t have an agenda.

I wish national interest being greater than local planning interest was an attitude which was a lot more common when it came to major or even just significant planning matters.

On topic

"Panic in the markets will force Starmer into an early election
We are careering towards a fully-fledged debt crisis. Labour’s chances of survival are narrowing by the day
Allister Heath" (£)

https://www.telegraph.co.uk/news/2025/08/27/market-meltdown-will-force-starmer-into-an-early-election/

Heath is unhinged and someone needs to stage an intervention .

He may be, but even the French Finance Minister has warned France is facing an IMF bailout

France is a different matter as complete insanity has broken out both amongst the public helped along by the far left and far right who are peddling unicorns . It will end in tears .

Much like UK then !!!!!!

I was in our global tax policy group today, talking through various domestic and international issues including fiscal positions.

The most notable thing is that almost all the major developed economies, with the exception of Germany and a couple of others, are in exactly the same position. They have debt to gdp at or above 100%, a large fiscal deficit and anaemic growth.

The UK’s debt to GDP is actually a little below the middle of the pack. The US (leaving aside Japan) is at the top and the biggest systemic risk. Our numbers really don’t scream IMF intervention.

However, where we’re an outlier in a bad way is the interest rates we’re paying on our debt, both directly (the gilt coupon) and indirectly (gilt yield). That’s down to market assumptions about inflation - higher than the Eurozone - and currency depreciation which mean investors demand a higher return for the same credit risk. So we pay more in interest than France despite having significantly less debt.

That’s what we need to focus on. Getting our debt servicing cost down.

The most noteworthy example on that front is Turkey. Relatively low debt to GDP ratio but because of its currency and inflation history a massive yield on sovereign debt meaning its actual debt servicing costs are above those of much more indebted European neighbours. Hard for them to escape this because they have decades of track record in high inflation and lira devaluation. Nigeria is an even more extreme example but that’s a very different economy.