Overview

• The proposed 'QE reserves income levy' could raise up to £8 billion a year and is modeled on Margaret Thatcher’s 1981 deposit tax, ending once QE gilts are unwound or the bank rate falls to 2%.
• IPPR also urges the Bank of England to slow bond sales to avoid about £12 billion a year in losses, with the combined measures projected to save more than £100 billion over the parliament.
• The think tank argues QE’s design channels public money into bank profits as higher rates boost interest paid on commercial bank reserves at the central bank.
• UK Finance and senior bank chiefs warn an additional tax would damage the UK’s competitiveness and curb lending and investment.
• The Bank of England says tax and spending decisions are for the government and reiterates its focus on returning inflation to the 2% target, while the government has not adopted the proposals as the Chancellor prepares the autumn budget.