Robin Brooks has noted that, in part, the reason for the UK’s deteriorating fiscal outlook is that the BoE is shrinking its balance sheet faster than its peers. As QE is unwinded, yields on gilts will rise accordingly. In other words, the BoE is transitioning away from monetising government debt.
Central-bank independence under fiscal…
Robin Brooks has noted that, in part, the reason for the UK’s deteriorating fiscal outlook is that the BoE is shrinking its balance sheet faster than its peers. As QE is unwinded, yields on gilts will rise accordingly. In other words, the BoE is transitioning away from monetising government debt.